Same flip, four borrowers, four different checks at closing. What decides it?

Question

I keep getting a version of the same question: why did one investor close a flip with nothing down while another had to bring $25,000 on a cheaper house?

In my experience it comes down to four things on the file, and most people only think about one of them.

• The property. What the after-repair value is, backed by closed sales in the same subdivision. A low price per square foot on the biggest house on the street usually means the ARV it needs is higher than anything that street has ever sold for. No credit score fixes that.
• Credit. Many lenders' best leverage starts around 720. Below that you can still get funded, but expect more cash in and a higher cost of money.
• Track record. Completed projects in the last 36 months. Top programs commonly want about 10. With fewer, a typical structure is 90% of purchase and 100% of rehab, capped around 70% of ARV.
• Liquidity. This is the one that surprises people. Even a $0-at-closing deal usually needs reserves, often around a third of the rehab budget plus six months of carrying costs.

The property. What the after-repair value is, backed by closed sales in the same subdivision. A low price per square foot on the biggest house on the street usually means the ARV it needs is higher than anything that street has ever sold for. No credit score fixes that.

Credit. Many lenders' best leverage starts around 720. Below that you can still get funded, but expect more cash in and a higher cost of money.

Track record. Completed projects in the last 36 months. Top programs commonly want about 10. With fewer, a typical structure is 90% of purchase and 100% of rehab, capped around 70% of ARV.

Liquidity. This is the one that surprises people. Even a $0-at-closing deal usually needs reserves, often around a third of the rehab budget plus six months of carrying costs.

Rough examples:

• 740 credit, 12 flips, $200K purchase, $40K rehab, $340K ARV: 100% of purchase and rehab, $0 at closing, but roughly $27K of reserves in the bank.
• Same credit, 4 flips, $180K purchase, $50K rehab, $320K ARV: about $25K at closing, and closer to $53K in verified funds once reserves are counted.
• Hard money sized on ARV alone (common in Texas): ARV x 70-75% minus repairs minus closing costs minus purchase = cash due. On a $300K ARV with $45K of work, buying at $150K means nothing due. Buying at $185K means $13K to $28K due. The purchase price moved the check more than anything else.

740 credit, 12 flips, $200K purchase, $40K rehab, $340K ARV: 100% of purchase and rehab, $0 at closing, but roughly $27K of reserves in the bank.

Same credit, 4 flips, $180K purchase, $50K rehab, $320K ARV: about $25K at closing, and closer to $53K in verified funds once reserves are counted.

Hard money sized on ARV alone (common in Texas): ARV x 70-75% minus repairs minus closing costs minus purchase = cash due. On a $300K ARV with $45K of work, buying at $150K means nothing due. Buying at $185K means $13K to $28K due. The purchase price moved the check more than anything else.

One lever people miss: the credit and experience requirements usually attach to the guarantor, not the property. A qualified partner on the file can change which program you land in.

For those of you flipping now, which of the four has been the hardest constraint on your deals this year, and how are you working around it?

Hossein Sharifi · Answer

Liquidity, usually, and it's the one people learn about last. Your second example shows why. Bringing $25K to closing feels like the cost, but $53K of verified funds is the real bar, and that's about double.

I'd add one line to the hard money formula, which is interest. On your $300K ARV example, a loan near $210K at 11% runs about $1,900 a month, so six months is roughly $11.5K before taxes, insurance and utilities. That's why the $185K purchase hurts twice. You bring more cash on day one and have less cushion if the sale takes 60 days longer.

Ametria Chaney · Answer

It almost always comes down to the borrower's risk profile, not the property. The investor closing with nothing down usually has three things: a strong credit profile, a documented track record of completed deals with that lender, and real cash reserves sitting in the bank. The one bringing $25K is typically newer, thinner on reserves, or using a more conservative loan program — so the lender prices the risk as cash in the deal. Loan type matters too: hard money, DSCR, and conventional each underwrite the borrower differently. The takeaway: your reputation with lenders is an asset you build deal by deal. Every clean close makes the next one's terms better.

Divin Kanyama · Answer

@Steve Waller This is a helpful breakdown because “nothing down” can sound much simpler than it really is. The distinction between cash required at closing and liquidity required to qualify is especially important. A borrower may finance the purchase and rehab but still need substantial verified reserves—and enough working capital to handle draw timing, overruns, and delays.

Liquidity seems like the hardest constraint in the current environment because higher carrying costs and thinner margins make lenders and investors less tolerant of surprises. The safest response is probably not just finding more leverage, but buying with a larger margin, maintaining dedicated reserves, phasing projects carefully, and using partners only when the economics and responsibilities are clearly documented. A stronger guarantor may improve the loan structure, but it cannot rescue an unsupported ARV or a deal with too little room for error.

Same flip, four borrowers, four different checks at closing. What decides it?

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