Fix & Flip Loan Guide: ARV, LTC, and How to Maximize Leverage

Business-purpose disclosure: All financing facilitated through our network of third-party capital sources. Buckle Up Capital is a broker, not a lender. Business-purpose transactions only.

A profitable flip lives or dies on two numbers: how much capital you can pull into the deal, and how little of your own cash you have to leave in it. Get the leverage right and a single rehab budget can fund two projects. Get it wrong and your money sits trapped in drywall for six months. This guide breaks down the three ratios every flipper has to master: ARV, LTC and LTV. This guide shows you the deal math capital sources actually run, and explains how to structure a fix-and-flip loan to keep the most cash in your pocket. All loans facilitated through our network of capital sources. We are a broker, not a lender.

What Is a Fix & Flip Loan?

A fix-and-flip loan is short-term, asset-based financing used to buy a distressed property, renovate it, and resell it for a profit, usually inside 6 to 12 months. Unlike a conventional mortgage, it is underwritten primarily on the deal itself: the property's current value, the renovation scope, and the projected resale value. Personal income, tax returns, and employment history matter far less than the equity and the exit.

Through our network of capital sources, fix and flip loans carry loan amounts from $100K to $5M+, leverage up to 90% of total project cost, rates starting at 9.99%, and interest-only terms of 6 to 24 months. Funds are released in two pieces: the acquisition portion at closing, and the rehab portion in draws as the work is completed. Because the loan is structured around the project rather than the borrower, it closes in 7 to 14 days, fast enough to compete with cash buyers at auction or on a below-market listing.

These are business-purpose loans only. Every transaction closes in an entity such as an LLC, LP, or corporation, and is intended for investment, not owner-occupancy.

ARV: The Number Every Flip Hinges On

ARV stands for After-Repair Value, meaning what the property will be worth once the renovation is complete and it is ready to sell. It is the single most important figure in a flip, because nearly every leverage decision flows from it.

ARV is not your asking price or your hope. It is set by comparable sales, meaning recently sold, renovated properties of similar size, age, and location to what yours will be when finished. A capital source will order its own valuation (an appraisal or broker price opinion) and lend against the more conservative of that figure and your supported estimate. If you tell the funder the ARV is $400K but the comps support $350K, the deal gets underwritten at $350K. Your leverage drops accordingly.

The discipline of accurate ARV is what separates investors who flip repeatedly from those who do one deal and stall. Pull three to five sold comps within the last 90 days, within roughly a mile, matched on bed/bath count and square footage, and adjusted for finish level. That number is your ARV. Do not use listing-price comps or active inventory.

LTC vs LTV vs ARV: The Three Leverage Ratios

Capital sources cap a fix-and-flip loan against multiple ratios at once and lend the lowest of them. Understanding all three tells you exactly how much cash you will need to bring.

• LTC (Loan-to-Cost) measures the loan against your total project cost, which is purchase price plus rehab budget. Through our network, LTC runs up to 90%. On a $200K purchase with a $50K rehab ($250K total cost), 90% LTC means the loan covers up to $225K, leaving $25K of your cash in the deal plus closing costs.
• LTV (Loan-to-Value) measures the loan against the property's current as-is value. It guards against overpaying for the acquisition itself.
• ARV (As-Repaired Value) cap limits total loan dollars to a percentage of the finished value, typically up to 75% ARV through our network. This is the ceiling that protects everyone: if the loan ever exceeds 75% of what the property will sell for, the deal does not pencil.

The funder applies all three and the most conservative one wins. A deal can have great LTC but blow past the 75% ARV cap if you overpay. That is exactly the trap accurate ARV math prevents.

How to Maximize Leverage

The goal is to finance as much of the project as possible while keeping the deal inside every ratio cap. A few structural moves do most of the work:

1. Finance the rehab, not just the purchase. The biggest leverage lever is the rehab draw. A loan that funds 100% of renovation costs (within the LTC and ARV caps) means your cash covers only the acquisition gap and closing costs, not the construction.
2. Buy below market. Every dollar of built-in equity at purchase widens the gap between your loan and the 75% ARV ceiling, which is what lets the funder advance more of your rehab.
3. Document the scope precisely. A detailed scope of work with contractor bids lets a capital source approve a larger, faster-releasing draw schedule. Vague scopes get conservative advances.
4. Bring a track record. Experienced flippers with completed projects often access higher LTC tiers and lower rates than first-timers. If you are new, a strong general contractor and a conservative deal can offset the lack of history.

As a broker, we shop your specific deal across multiple capital sources. On leverage-sensitive flips, the difference between an 85% and a 90% LTC program can be thousands of dollars of your own cash freed for the next project.

Fix & Flip Deal Analysis: The 70% Rule

Seasoned investors use a fast screen called the 70% rule to decide whether a flip is worth a full analysis: your all-in purchase price should not exceed 70% of ARV minus rehab costs.

Maximum purchase price = (ARV × 0.70) minus rehab budget

Worked example. A property will be worth $400,000 after repairs (ARV), and needs $60,000 in renovation:

• $400,000 × 0.70 = $280,000
• $280,000 minus $60,000 = $220,000 maximum purchase price

That 30 percent spread is not pure profit. It absorbs holding costs (loan interest, taxes, insurance, utilities), selling costs (agent commissions, closing), and your margin. For a complete ROI walkthrough including all cost categories, see our fix and flip ROI analysis guide. On this deal, total project cost is $280K. At 90% LTC, the loan covers up to $252K, and you bring roughly $28K plus closing and reserves. If the property sells at $400K, your gross spread before costs is $120K. After interest, holding, and selling costs, a disciplined investor protects a real net margin.

The 70% rule is a screen, not a guarantee. Hot markets sometimes justify 72 to 75%; thin-margin or slow markets demand 65% or better. But run it on every deal before you fall in love with the property.

Rates, Terms, and Draw Schedules

Representative fix-and-flip terms facilitated through our network:

Item	Range
Loan amount	$100K - $5M+
Leverage	Up to 90% LTC / 75% ARV
Rate	Starting at 9.99%
Term	6 to 24 months, interest-only
Close time	7 to 14 days

Rates are representative and set by the capital source; final terms depend on experience, leverage, and property type. Rates are higher than a 30-year mortgage because this is a short-term bridge instrument underwritten on equity and speed, not on credit and income. You pay for that speed. Interest accrues only on funds drawn.

Rehab funds release on a draw schedule: the capital source advances the acquisition portion at closing, then reimburses renovation costs in stages as work is inspected and completed. You typically front each phase of work and get reimbursed, so a modest working-capital cushion keeps the project moving between draws.

How to Qualify and What You'll Need

Because the loan is asset-based, the document package is light compared to a conventional mortgage. Through our network, expect to provide:

• Property details: address, purchase price, and supported ARV
• Purchase contract or LOI (if under contract)
• Scope of work with contractor bids for the rehab
• Entity documents. The deal closes in an LLC, LP, or corporation
• Three months of bank statements
• Government-issued ID
• Credit: most programs work with 620+; some equity-heavy programs are more flexible

No tax returns, no W-2s, no income verification on most programs. The deal and your exit carry the file. Colorado flippers and investors seeking hard money lenders in Denver can submit their deal through our network and receive competing term sheets in 24 to 48 hours.

The Exit: Flip or Refinance

A fix-and-flip loan is never permanent financing. Plan the exit before you close:

• Flip: sell the renovated property and pay off the loan at closing. The spread, net of all costs, is your profit.
• Refinance to hold (BRRRR): if you decide to keep the property as a rental, refinance the short-term loan into a long-term DSCR loan once the rehab is complete and the property is leased. We can facilitate both legs through our network.

This hard-money-to-DSCR bridge, where you acquire and rehab fast then refinance into 30-year rental financing, is one of the most common two-step plays in real estate investing, and we structure both sides in a single relationship.

FAQ

What is the difference between LTC and ARV on a fix and flip loan?

LTC (loan-to-cost) caps the loan against your total project cost, which is purchase price plus rehab. ARV caps the loan against the finished, after-repair value. A capital source applies both and lends the lower amount. Through our network, that is typically up to 90% LTC and up to 75% ARV.

How much money do I need to bring to a flip?

Generally the LTC gap plus closing costs and a reserve. At 90% LTC on a $250K total-cost project, you bring roughly $25K plus closing and a cushion for draw timing. Buying below market and financing the rehab reduce the cash you leave in the deal.

How fast can a fix and flip loan close?

Through our network, asset-based fix-and-flip financing typically closes in 7 to 14 days because underwriting is driven by the property and the exit, not by personal income documentation.

Do I need experience to get a fix and flip loan?

Not always. Experienced flippers access higher leverage and better rates, but first-time investors can qualify with a conservative deal, a strong scope of work, and a reputable contractor. Requirements vary by capital source.

Can I finance the renovation, not just the purchase?

Yes. Most fix-and-flip programs in our network fund rehab costs through a draw schedule, within the LTC and ARV caps. Financing the rehab is the single biggest lever for keeping your own cash out of the deal.

Related Resources

Explore related financing options through our network of capital sources:

• Hard Money Loans for Real Estate Investors
• Commercial Real Estate Loans
• Hard Money vs DSCR vs Conventional
• Arizona Real Estate Investor's Guide to Hard Money

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Ready to run the numbers on your next flip? Buckle Up Capital reviews deals same business day and turns term sheets in 24 to 48 hours. Submit your deal at /contact. No credit pull, no obligation, business-purpose transactions only.