How Do You Plan Financing Before You Find the Deal?

Question

Many flippers focus heavily on ARV and rehab budgets, but financing strategy often gets finalized last.

For experienced flippers, how early do you line up capital, and what challenges have you seen when funding is rushed?

Greg Kasmer · Answer

@Kelly Schroeder - I've done a few flips, but mostly buy and hold via BRRRRs. Some of my financing suggestions include: 1) Staying in contact with 2-4 banks/credit unions as well as brokers on a given basis, 2) Sharing project details immediately after LOI/under contract, and 3) Negotiating terms with at least two options for financing.

What other strategies do you suggest?

Drago Stanimirovic · Answer

Kelly, great question, this is where seasoned flippers separate themselves. The best operators treat capital planning as step one, not the cleanup crew. They’ve already dialed in their lending relationships, know their approval timelines, and have layered options depending on deal type and urgency.

When funding is rushed, the usual culprits show up: missed closing dates, weakened negotiating power, or worse, deals that never close. Planning capital ahead of time isn’t just smart , it’s a competitive advantage in a fast-moving market.

Bo Smith · Answer

100% this. One thing I'd add - get that term sheet but also nail down inspection period upfront. Too many newbies get the money lined up but forget to negotiate a 10-14 day inspection window in the offer. Gives you time to run real numbers before you're locked in. How long do you typically ask for on inspection periods?

Frank Pyle · Answer

I line up capital before I’m seriously shopping because speed comes from having terms and a draw process locked in. The actionable move is to get a lender or private money lined up with a written term sheet and a sample draw schedule, then build your max offer off their LTC and points instead of guessing. Quick checkpoint I like is purchase plus rehab should be inside 85 to 90 percent of ARV on a flip, and you still want enough reserves to cover 6 months of interest and overruns. When funding gets rushed the pain is usually appraisal timing, insurance and entity docs, and a draw process that starves the contractor and drags the timeline. Are you seeing more deals die from low appraisals or from rehab overruns when buyers scramble for money at the end?

Scott Chilton · Answer

From what I have seen, the best flippers treat financing like the foundation of the house. They lock it in before they ever get serious about a deal. When the money is lined up early, everything else moves faster and smoother. Offers are stronger, sellers take you more seriously, and you can act quickly when a good deal shows up.

When funding is rushed, problems tend to pile up. Rates are higher, fees sneak in, timelines get tight, and small delays can turn into big holding costs. I have also seen deals fall apart simply because the lender could not move fast enough.

The upside of planning your capital early is peace of mind. You know your numbers, your limits, and your exit before you buy. That clarity helps protect your profit and keeps one bad surprise from wiping out months of work.

How Do You Plan Financing Before You Find the Deal?

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