Hey Linda! I structured a financing game plan upfront that has worked well for us in the past — using private money for the down payment and hard money to finance the rest. Every deal is different, of course, but having that structure in place has helped us get a much better estimate of our out-of-pocket costs going into a deal.
For us, financing is a lower priority when initially evaluating a flip. First, we work through the scope of work and total project costs. If the spread works based on those initial numbers, then we start shopping around to see if we can reduce our carrying and financing costs. That becomes especially important in a higher-interest-rate environment!
Houston, TX · Member since 2025 · 20 posts · 4 votes
1d
I’m a lender, and I’d get the financing boundaries figured out before making offers. Then price the actual property once you have the purchase numbers and a real rehab scope.
I have calculators I can share with you on rehab costs, and loan terms, fix and flip costs etc. On the private-money down payment mentioned above, I’d get the hard money lender’s okay on that structure upfront. Show them the additional debt, its payments and whether it’s secured against the property. Don’t assume every lender will allow the same setup.
I’d also ask how much rehab cash you need before the first draw comes back. A loan covering the rehab budget doesn’t necessarily mean that money is available on closing day. Those two answers can change how much of your own cash the deal really needs.