I assume full-system replacements: For properties over 30 years old, budget for a new roof, HVAC, plumbing, and electrical, unless recent upgrades are documented.I add an Unknowns Premium: I include a 10–25% contingency buffer to account for hidden issues such as mold, structural damage, or layout surprises.I anchor my ARV to low comps: Protect your profit margins by basing your ARV on the lowest valid comparable sales in the area.

Short-term capital is extremely effective when the exit is clearly defined upfront.From a lender’s standpoint, the biggest safeguards I look for are:A realistic timeline (with buffer) for rehab, lease-up, or saleA clearly executable exit (refi, sale, or take-out lender already identified)Conservative leverage, especially on heavier value-add projectsBorrowers who understand holding costs and don’t rely on best-case scenariosWhere investors get into trouble isn’t the cost of short-term capital — it’s when delays stack up and there’s no margin or backup plan.Used properly, short-term funding is a tool to create speed and opportunity.

I still run my deal at today plus 0.75 percent, add a cushion on taxes and insurance, and fund reserves before calling it cash flowing.Curious what buffers everyone is baking in for 2026.

I still run my deal at today plus 0.75 percent, add a cushion on taxes and insurance, and fund reserves before calling it cash flowing.Curious what buffers everyone is baking in for 2026.

From a lender’s perspective, the deals that move faster than expected usually check a few boxes right away:• Clean, well-organized numbers — realistic rents, budgets, and timelines• A clear, executable exit — refinance or sale already thought through• Borrowers who build in buffer instead of relying on best-case scenariosTrack record helps, but I’ve seen newer investors get approvals quickly when the deal itself is straightforward and the plan makes sense.Speed usually comes from removing uncertainty, not cutting corners.Happy to help walk through scenarios or answer questions from the lending side if useful.

That’s usually where first-time flippers feel the most pressure.A few things I’d keep an eye on:Be conservative on ARV and resale timingAdd extra buffer to the rehab budget, especially working with a new GCMake sure the deal still works if it takes longer to sell than plannedOn the financing side, having short-term capital structured realistically (draws, extensions, interest carry) matters just as much as the purchase price.Happy to help walk through numbers or scenarios from the lending side as you get closer — and curious to hear what locals think about those neighborhoods.

Most people need 20-30% forced appreciation through rehab to make the math work if they didn't buy at a steep enough discount.Pro tip: Build in a 10% buffer on both rehab costs and ARV comps—appraisers are conservative, and contractors are optimistic.

Condos can be a little cheaper on exterior but HOA rules access and work hours can add labor time so I usually carry a little buffer.

FDICIn the context of real estate and promissory notes, stress-testing is best viewed as a risk awareness tool:It doesn’t remove risk, but it helps identify what could go wrongIt helps quantify how sensitive the deal is to changes in key assumptionsIt informs whether there are adequate buffers (reserves, conservative pricing, clear legal position) if stress scenarios occurThis perspective is consistent with commonly published guidance on note investing and risk management, which emphasizes both default risk and market fluctuations as primary areas of concern for potential investors. guideforinvestment.com

Over the years I’ve found that having reliable local vendors and building a little buffer for unexpected stuff helps, but it’s still the part that consistently takes the most energy and patience.