The average gross profit on a house flip in Q1 2026 was $65,000, with investors buying at around $260,000 and selling near $325,000 — a 25% return on investment, according to ATTOM data. For a first-time investor, that figure is both encouraging and incomplete. Gross profit is not net profit. Before you see a dollar, you’ve paid loan fees, carrying costs, closing costs on both ends, and a renovation budget that almost always runs over. Understanding how the financing works — and what it actually costs — is where a first flip gets won or lost.
LendSure Home Loans offers fix-and-flip financing for first-time investors, with no tax returns, no income analysis, and no prepayment penalty. Rates and leverage are experience-dependent, but the door is open. If you have a property in mind, our team can walk through the numbers with you before you formally apply.
What a Fix and Flip Loan Actually Is
A fix-and-flip loan is a short-term, interest-only loan used to purchase and renovate a residential property for resale. It is a business-purpose loan — not a consumer mortgage — and it closes in an LLC or S-Corp. There are no tax returns, no W-2s, and no personal debt-to-income calculation. Lenders evaluate the deal: the purchase price, the renovation scope, and the after-repair value.
LendSure’s Fix and Flip program runs on a 12-month interest-only term with no prepayment penalty. Loan amounts go up to $3 million on 1 to 4 unit residential properties, including condos. First-time investors are welcome — leverage scales with experience, which means the terms improve as your track record builds.
How Lenders Size the Loan: LTC and ARV
Two numbers control how much a lender will put into your deal, and both apply at the same time.
Loan-to-Cost (LTC)
LTC is the loan as a percentage of total project cost: purchase price plus renovation budget. For first-time investors, LendSure finances up to 75% of both the purchase price and the rehab budget. That means you bring 25% of the total cost — including cash to close, reserves, and your share of the renovation draws.
Loan-to-ARV
The loan is also capped as a percentage of ARV — the appraised value of the property after renovations are complete. LendSure’s loans cannot exceed 65% to 70% of ARV depending on experience level. If your ARV is accurate and your budget is realistic, both metrics align. If your ARV is inflated, the ARV cap will reduce the loan below what the LTC math would otherwise allow. This is the single most common reason first-time investors are surprised by their loan amount.
Understanding ARV — and Why Beginners Get It Wrong
After-repair value (ARV) is the appraised value of the property once renovations are complete, determined by a licensed appraiser using comparable sales of renovated homes in the same area. It is not the Zestimate, not the highest sale you can find on the street, and not what you think the renovation will be “worth.”
A professional ARV calculation must use only sold comparable sales from the last 60 days — not the list price of active inventory. Beginners consistently overestimate ARV by pulling comps from different neighborhoods, using listings instead of closed sales, or assuming a renovation will add more value than the market supports.
The 70% Rule
A common guideline used to quickly screen a potential deal:
Maximum Offer = (ARV × 70%) – Repair Costs
If a property has an ARV of $300,000 and needs $50,000 in repairs, the 70% rule suggests a maximum offer of $160,000. This is a screening tool, not a lender requirement — but it builds a margin that accounts for carrying costs, loan fees, commissions, and the unexpected. In 2026, investors in high-velocity markets adjust to 75% in tight inventory zones, or 65% in slower neighborhoods where homes sit for months.
The Costs Beginners Forget to Budget For
The renovation budget gets most of the attention. These are the items that quietly erode profit margins on a first deal:
| Cost Category | What to Expect |
| Loan origination fees | Typically 1–2 points at closing |
| Interest payments | Accrue on drawn funds for the full hold period |
| Draw inspection fees | $150 per draw at LendSure |
| Closing costs (purchase) | Title, escrow, and lender fees |
| Closing costs (sale) | Realtor commissions, transfer taxes |
| Property taxes | Prorated through the hold period |
| Insurance | Required for the duration of the loan |
| Utilities | Water, electric, gas during renovation |
| Contingency reserve | Budget 10–15% of the rehab for surprises |
Rehab costs and carrying expenses typically run between 20% and 33% of the property’s after-repair value, according to ATTOM Q2 2025 data. On a $300,000 ARV property, that range is $60,000 to $99,000 before profit — a number that surprises most first-time investors who built their model around the renovation budget alone.
What LendSure Evaluates on a First Flip
Without a track record, the deal itself carries more weight in the underwriting.
Deal quality. Purchase discount relative to ARV, comparable sales supporting the resale price, and a renovation scope that is specific and priced. A vague scope of work is a common reason for delays or reduced funding.
Liquidity. Cash to close, six months of interest-only payment reserves, and 10% of the rehab budget if it exceeds $250,000. Retirement accounts are acceptable. Lenders need to see that you can absorb the unexpected without the project stalling.
Exit strategy. A clear plan to sell — and a documented fallback. LendSure can refinance a completed property that doesn’t sell into a DSCR loan qualifying on rental income, with no seasoning required if the fix-and-flip loan was also with LendSure. Modeling that fallback before you close is a standard part of sound deal structure.
First-Time vs. Experienced Investor Financing
Leverage scales with experience. Here is how LendSure’s tiers work:
| Experience | Purchase LTV | Rehab LTV |
| First-time (0 flips) | Up to 75% | Up to 75% |
| 1–2 flips in last 36 months | Up to 80% | Up to 80% |
| 3+ flips in last 36 months | Up to 90% | Up to 90% |
Experience is verified through public records under the borrower’s own name — not as a capital contributor on someone else’s deal. Only flips completed within the last 36 months count. The implication for first-time investors: the first deal is where you earn the terms that make the second deal more efficient.
Ready to Talk Through Your First Deal?
For investment transactions like fix-and-flip projects, you can share your deal details with LendSure’s team before submitting a full application.
LendSure’s Fix and Flip program is authorized in Alabama, Arizona, California, Colorado, the District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, New Jersey, North Carolina, Ohio, Oregon, Rhode Island, Tennessee, Texas, Utah, and Virginia. Tell us about the property.
Frequently Asked Questions
Can first-time investors qualify for a fix-and-flip loan?
Yes. LendSure welcomes first-time investors, with leverage set at up to 75% of both the purchase price and rehab costs. Rates and terms improve with a verified track record, so the first deal is also the one that unlocks better pricing on the next. There is no minimum number of prior flips required to apply.
How much cash do I need for my first flip?
At a minimum: 25% of the total project cost (purchase plus renovation), six months of interest-only payment reserves, 10% of the rehab budget if it exceeds $250,000, and enough to cover closing costs on both the purchase and the sale. A 10% to 15% contingency buffer on the renovation budget is standard practice — unexpected repairs, permit delays, and material cost changes are not exceptions; they are the rule.
What is ARV and why does it matter?
ARV is the appraised value of the property after renovations are complete, based on comparable sales of finished homes in the same area. Lenders use it to cap the loan at 65% to 70% of the completed value, regardless of what the project cost math might otherwise support. Overestimating ARV is the most common reason first-time investors receive a smaller loan than expected.
What is the 70% rule in house flipping?
The 70% rule is a deal-screening guideline: maximum offer equals ARV multiplied by 70%, minus estimated repair costs. On a property with a $300,000 ARV and $50,000 in repairs, that produces a maximum offer of $160,000. It is not a lender requirement, but it builds a margin that accounts for carrying costs, fees, commissions, and contingencies that beginners often underestimate.
What happens if the property doesn’t sell?
LendSure’s 12-month term provides a reasonable runway. If the property does not sell within the term, LendSure can refinance it into a DSCR loan that qualifies on rental income rather than personal income, with no seasoning requirement if the fix-and-flip loan was also with LendSure. Modeling this fallback before closing on the purchase is sound deal structure, not pessimism.
How are renovation funds distributed?
All renovation funds are held in a lender-controlled holdback at closing. As work is completed, you submit a draw request. A third-party inspector confirms the work matches the approved scope, and LendSure wires funds the next business day after sign-off — directly to you, not to contractors.
How quickly can a fix-and-flip loan close?
LendSure’s typical closing timeline is 21 to 30 days. When a borrower is responsive and conditions move efficiently, closings as fast as 7 to 10 business days have been completed.
