Short answer: a fix and flip loan is commonly sized as the lower of about 85–90% of the purchase price plus up to 100% of the rehab budget, or about 70–75% of the after-repair value (ARV). This calculator runs both tests, then adds points, interest, holding and selling costs to estimate cash to close, profit and return on your cash.
Run your flip numbers
Every result updates as you type. The defaults are a $300,000 purchase with an $80,000 rehab and a $520,000 ARV, held six months at an illustrative 10.5% rate.
Typical ranges for private, business-purpose flip lending. Limits, rates and fees vary by lender, experience, credit and market.
How each input works
Purchase price, rehab budget and ARV
The ARV is what the property should sell for once the work is done, usually set by an appraisal that reviews your scope and comparable renovated sales. Use closed sales, not list prices. Many lenders also base the purchase advance on the lower of the price or the as-is value.
The three leverage limits
Flip lenders commonly advance up to about 85–90% of the purchase and up to 100% of the rehab, then cap the total loan at roughly 70–75% of ARV. First-time flippers usually see lower purchase leverage. See ARV and loan-to-cost for how lenders apply each test.
Rate, points and closing costs
Flip loans are usually interest-only for 6 to 24 months, with 1 to 3 origination points common. The default rate is only an illustration. Closing costs cover title, appraisal, legal and lender fees.
Holding and selling costs
Holding costs are what you pay each month while you own the house: taxes, insurance and utilities. Selling costs (commissions, transfer taxes, seller concessions) are entered as a percentage of ARV.
How the calculator works it out
- Maximum loan = the lower of (purchase × purchase % + rehab × rehab %) and (ARV × ARV %). The results say which limit binds.
- If the ARV cap cuts the loan, the shortfall comes out of the rehab funding first; only if it is larger than the rehab funding does the purchase advance shrink.
- Cash to close = purchase price − purchase advance + closing costs + points.
- Interest is interest-only on the full loan for every month held. With the box ticked, it is charged on the purchase advance plus half the rehab funds, as if draws were spread evenly.
- Total project cost = purchase + rehab + points + closing + interest + holding + selling costs. Profit = ARV − total project cost.
- Cash invested = cash to close + any rehab you fund + interest + holding costs. ROI = profit ÷ cash invested; the annualized figure is ROI × 12 ÷ months held.
Worked example: the default deal
A $300,000 purchase, an $80,000 rehab and a $520,000 ARV, with 90% of purchase, 100% of rehab and a 70% ARV cap. Illustrative assumptions, not a quote.
| Purchase advance: 90% × $300,000 | $270,000 |
| Rehab funding: 100% × $80,000 | $80,000 |
| Cost-based limit | $350,000 |
| ARV limit: 70% × $520,000 | $364,000 |
| Maximum loan (the cost-based limit binds) | $350,000 |
| Cash to close: $30,000 down + $5,000 closing + $7,000 points (2%) | $42,000 |
| Interest: $350,000 × 10.5% ÷ 12 = $3,062.50 × 6 months | $18,375 |
| Holding costs: $600 × 6 | $3,600 |
| Selling costs: 7% × $520,000 | $36,400 |
| Total project cost: $300,000 + $80,000 + $7,000 + $5,000 + $18,375 + $3,600 + $36,400 | $450,375 |
| Projected profit: $520,000 − $450,375 (13.4% of ARV) | $69,625 |
| Cash invested: $42,000 + $18,375 + $3,600 | $63,975 |
| Return on cash: $69,625 ÷ $63,975 (217.7% annualized, simple) | 108.8% |
If the lender charges interest only on drawn funds, interest falls to $16,275 ($270,000 + $40,000 average rehab balance, × 10.5% ÷ 12 × 6).
When the ARV cap binds
Raise the rehab to $120,000 on the same deal. The cost-based limit becomes $390,000, but the ARV limit stays at $364,000, so the loan is $364,000. The $26,000 difference comes out of the rehab funding: the lender funds $94,000 of the work and you pay $26,000. Cash to close is $42,280 (points are now $7,280), interest is $19,110, and profit drops to $28,610, only 5.5% of ARV, so the calculator flags a thin margin. A bigger budget did not buy a bigger loan.
Want each sizing test run on a real deal?
Share the price, budget and ARV estimate. LoanFight reviews the scenario and connects you with a lending partner whose limits fit the project.
Tell Us About Your Deal →What the calculator leaves out
It does not include a total loan-to-cost cap some lenders add, per-draw inspection fees, extension fees, interest reserves, rate changes, overruns beyond your budget, income taxes or the cost of your own time. It also assumes the sale closes at the full ARV in the month you enter. A non-owner-occupied flip is generally business-purpose credit, which is outside most consumer mortgage rules.
Fix and flip calculator FAQs
How much will a lender loan on a fix and flip?
Commonly the lower of two tests: about 85–90% of the purchase price plus up to 100% of the rehab budget, or about 70–75% of the after-repair value. First-time flippers usually get less. It varies by lender, experience, credit and market.
What does it mean when the ARV cap binds?
The ARV limit is lower than the cost-based limit, so the loan is cut to the ARV limit. This calculator takes the cut from the rehab funding first, which means you pay for part of the work yourself. Some lenders reduce the purchase advance instead, so ask how yours handles it.
Is interest charged on the full loan or only on drawn funds?
It depends on the lender. Some charge interest on the full loan from closing, including undrawn rehab funds. Others charge only on money advanced so far. Tick the drawn-funds box to model the second approach with half the rehab drawn on average.
What is a good profit margin on a flip?
There is no rule, but many investors want profit of at least 10% of ARV, and often more, before taxes. Below that, a modest overrun, a lower sale price or a few extra months can erase the profit. The calculator flags margins under about 10%.
Why is the ROI so high when I borrow most of the cost?
Return on cash invested divides profit by your own cash. High leverage shrinks that cash, so the percentage rises, but the risk does too: a loss is also magnified. The annualized figure is simple, not compounded, and is before taxes.
Does LoanFight make fix and flip loans?
No. LoanFight is not a lender. We review your scenario and connect you with a lending partner whose purchase, rehab and ARV limits fit the project. The partner sets the actual terms.
Sources
- CFPB: Regulation Z, 12 CFR 1026.3(a) — credit extended primarily for a business purpose is exempt from most consumer mortgage rules.
- CFPB: Official interpretation of §1026.3 — how non-owner-occupied rental and investment property is treated.
Educational estimate only. LoanFight is not a lender, does not make credit decisions and does not set loan terms. The default rate, points and limits are illustrations of common ranges, not a quote. Your lending partner will provide the actual terms.