A fix-and-flip loan usually combines an acquisition advance with renovation funding released under a draw process. The total commitment is not the amount deposited at closing. For a first project, understand the cash you must bring, the work you must fund temporarily and how the loan will be repaid when you sell.
Can you get a fix-and-flip loan with no completed flips?
Some lender programs consider first-time investors. Others require completed projects or apply different limits to inexperienced borrowers. Stonehaven can review the scenario with lenders whose criteria may fit; a strong property does not remove borrower requirements.
A useful first file contains an itemized contractor scope, a realistic timeline, evidence for the estimated resale value and available funds. Explain any related construction or real estate experience without calling it a completed flip. A first cosmetic renovation and a first structural rebuild are very different execution risks.
This guide concerns property acquired for business-purpose resale. If you intend to occupy the home, start with a residential financing review.
Know what LTC, LTV and ARV actually measure
| Term | Meaning | Question to ask |
|---|---|---|
| LTC: loan to cost | Loan amount divided by lender-recognized project cost | Does the cost basis include only purchase and rehab, or also fees and other items? |
| LTV: loan to value | Loan amount divided by the value the lender accepts | Is this current value, purchase value or a completed valuation? |
| ARV: after-repair value | Estimated market value after the proposed work | What scope and comparable sales support it? |
| Rehab holdback | Loan proceeds reserved for eligible work | What must happen before each portion is released? |
Stonehaven has lender relationships that may consider up to 100% of eligible costs on qualifying scenarios. That does not establish first-time-investor eligibility, 100% ARV financing or no cash needed. Ask what “100% LTC” or “LTCV” means in the actual written proposal, including its denominator, excluded expenses and any additional collateral. Avoid comparing percentages with different bases.
Separate the loan commitment from cash at closing
A first flip, worked through
Assume a $200,000 purchase, $60,000 renovation budget and $350,000 projected ARV. A hypothetical $220,000 loan includes a $160,000 acquisition advance and $60,000 rehab holdback.
The loan equals approximately 84.6% of the $260,000 purchase-plus-rehab cost and 62.9% of the $350,000 ARV. These are two descriptions of the same assumed loan, not lender limits.
| Item | Amount | Why it matters |
|---|---|---|
| Purchase equity | $40,000 | $200,000 purchase less $160,000 initial advance |
| Acquisition and financing costs | $10,000 | Hypothetical costs outside the advance |
| Renovation contingency | $10,000 | Budgeted capacity for changes, not assumed profit |
| Holding and liquidity reserve | $15,000 | Funds retained for project obligations |
| Planning cash total | $75,000 | Before any additional float needed to bridge draw timing |
Build a weekly cash schedule as well. If the contractor needs $12,000 before a reimbursable milestone, identify which funds can cover that gap without consuming money committed elsewhere. A fully financed rehab budget can still require working cash.
How renovation draws affect your schedule
A draw is a release of part of the rehab funding. A lender may require completed work, an inspection, invoices and other supporting items. Advance or reimbursement arrangements vary. Get the actual process before signing a contractor payment schedule; do not promise a contractor funds on a date the lender has not committed to.
- Confirm whether interest is charged on outstanding advances, the full commitment or another contractual basis.
- Identify inspection fees, draw minimums, retainage and evidence needed for release.
- Ask how change orders, cost overruns and contractor replacement are handled.
- Confirm whether permits and insurance must be in place before work or funding.
The rehab financing guide works through a draw and contingency example in more detail.
Underwrite the sale, including a slower outcome
Estimate the sale price after testing local comparable sales and the finished scope. Then deduct acquisition, renovation, finance and holding costs, selling expenses and any contingency actually spent. Loan principal is a financing source and payoff obligation; do not subtract it a second time after already counting all project costs when calculating project profit.
A profit estimate is not a cushion you already own
Using the $350,000 sale assumption, deduct $200,000 purchase, $60,000 work, $10,000 acquisition/financing costs, $15,000 holding costs and $25,000 selling costs. The modeled result is $40,000 before income taxes and uncounted expenses.
A $20,000 lower sale, $10,000 rehab overrun and $5,000 extra holding cost reduce that result to $5,000. Those are stress assumptions, not market forecasts. Any unspent reserve remains your money; do not treat the same reserve as both an expense and a separate loss.
Check maturity, extension eligibility and extension costs. An extension or a switch to a rental refinance is a separate decision, not a guaranteed fallback. Discuss a rental exit before closing if it is part of your plan.
How Stonehaven can help with your first flip
We can review your scope, cash plan, experience and exit, then seek a suitable lender fit. Placement means presenting the deal to an appropriate funding source and working through its requirements; it is not an approval before underwriting.
We can help compare the cash at closing and during the project, identify cost exclusions, and clarify the loan’s repayment and draw structure. You remain responsible for inspections, contractor performance, the purchase decision and the work. Start with the deal checklist, including the property’s state, purchase price, repair budget, estimated value and target close.
Bring us your first flip scenario
We can help review the purchase, rehab budget, cash requirement and proposed exit before seeking lender terms. Let us know you are preparing your first investment project.
Tell us this is your first investment. We follow up by text or email. Keep account numbers and private documents out of public forms.
Sources and scope
Sources support the concepts identified in the guide. One lender’s criteria are not universal and do not establish terms available through Stonehaven. Examples are hypothetical, not closed transactions or offers.