Where Flips Break
A $180K rehab is funded in four draws. The second inspection runs eight days late, and your electrician takes another job in the meantime. A 5-month project becomes 7, and the extra interest comes straight out of your profit.
On a small flip, you absorb that. On a large one, it can erase the margin.
Flips are usually a fast decision. If the numbers work, we move. If they don’t, you’ll know on the first look.
The decisions I structure
- ARV. How conservative it really is, since the appraiser won’t use your best comp.
- Draws. Matched to your construction phases, so funding keeps pace with the work.
- Your cash in the deal. How much you bring and where it sits in the stack.
- The exit. A sale or a refinance. If it’s a refinance, it gets tested now, not at month six. DSCR Loans
- The 60-day test. If the deal only works on schedule, it doesn’t work.
The pattern I see most
Operators chase the highest loan-to-cost, then learn how the lender handles draws after closing. More money at the table doesn’t help if phase two is funded late. A slightly lower loan-to-cost with a draw process that keeps your crew working usually protects more profit.
Who this is for
- Loan amounts of $250K and up
- You’ve completed and sold at least one flip of similar size
- Properties in most of the U.S., through a nationwide network of capital sources
Not a fit: first flips, or loans under $250K.
What I control
I’m not the lender. They approve the loan and set the terms. I control how the financing is structured, who sees it, and whether the draw process fits your build before you sign.
Under contract on a larger flip? Send me the numbers before you commit, and I’ll pressure-test the draws and the exit.