The Investors Guide to Fix and Flip Loans 101

Leverage, Draws, and Closing Fast

Fix-and-flip deals can move quickly, and in a competitive acquisition environment, slow or unreliable financing can be the difference between securing the property and watching someone else win it. The seller may even want an answer in 48 hours. A buyer should already have capital ready. For newer investors, this is one reason why the selected lender for house-flipping purposes can be equally important as the property itself.

If you're comparing fix-and-flip lenders, evaluating house-flipping loans, or pursuing reliable fix-and-flip funding, it helps to understand the basic terms lenders use. Knowing how these loans are structured can help you evaluate opportunities more confidently and avoid surprises during the financing process.

Let's start with two key terms. Hard money and private money are both alternatives to traditional bank financing. Hard money loans are a type of lending that typically comes from private lenders that primarily base the loan on the asset value of the property being financed. Private money is a term that refers to loans provided by midsize to larger investor groups, or private lending companies rather than by banks. Many in the real estate investment lending space have evolved to the private lending label from the stigmas associated with hard money due to its higher rates and less organized nature of lending. Private money is more than just a marketing term, though; it has evolved to institutional capital, more standardized underwriting, technology supported policies, procedures, warehousing, securitizations and national lending alternatives. The industry's evolution from hard money to private lending reflects both a branding shift and a fundamental maturation of the business—from informal, relationship-driven lending to institutional, professionally managed real estate finance.

Unitas Funding is a direct private money lender that works with investors who need to move fast. Our fix-and-flip, ground-up construction and bridge type loans are designed to help borrowers simply bridge, buy, renovate, and sell investment properties under tight timelines and fill a void that banks and hard money lenders cannot provide.

Understanding LTC, LTV, and ARV

Before you borrow, it helps to understand loan to cost vs. loan to value, and to know how the after-repair value comes into play.

Loan to cost, or LTC, looks at the total cost of the project — typically the purchase price plus the rehab budget. If a property costs $150,000 and the renovation budget is $50,000, the total project cost is $200,000. A lender offering 92.5% LTC would finance that portion of the total cost, with the borrower contributing the remainder. In this example, 92.5% equals $185,000.

Acquisition loan to value, or Acq. LTV, is a simple ratio: take the acquisition loan amount and divide it by the property's current as-is value. For example, a $100,000 loan on a property worth $200,000 today equals a 50% Acq. LTV. The lower the number, the more cushion exists between what is owed and what the property is currently worth. In fix-and-flip deals, this number is often high — because investors are buying distressed properties and the lender is financing most of the purchase. That is why hard-money lenders also look at ARV. The as-is value alone does not tell the full story.

After-repair value, or ARV, is the estimated value of the property after the renovation is complete. Hard-money loans for real estate investors differ from traditional bank loans in a number of ways, including the emphasis placed on this forward-looking metric. A hard-money lender is not only looking at what the property is worth today — it's also evaluating what it may be worth after the work is finished.

For example, if your total purchase and rehab cost is $200,000 and the expected ARV is $275,000, the lender may base the loan amount on a percentage of that future value. Here is how that works in practice.

Hypothetical Scenario: How LTC, AR-LTV, and ARV Work Together

An investor identifies a distressed single-family home in a strong suburban market. Here are the deal inputs and how the math breaks down:

In this scenario, the lender is financing 92.5% of total project cost while sitting at 67.3% of the property's projected post-renovation value. That gap — between what is owed and what the property will be worth — is where the lender's security lives and where the investor's upside is created.

If the investor sells the renovated property for $275,000 against a loan balance of $185,000, the gross margin before selling costs is $90,000 — on a $15,000 equity contribution. Understanding how LTC, ARV, and AR-LTV interact is how experienced investors evaluate leverage before they make an offer.

Key Lending Metrics at a Glance

Note: The figures above are hypothetical examples for illustrative purposes only. Actual loan terms depend on deal specifics, market conditions, and borrower qualification.

On Acq. LTV: In fix-and-flip deals, the acquisition loan is often close to — or at — the as-is value of the property. This means the Acq. LTV can be high, sometimes 90% or above. That is exactly why hard-money lenders rely on ARV rather than as-is value alone to evaluate the deal. The ARV tells the lender what the property should be worth after renovation — and that is where the real security lives.

How a Construction Draw Schedule Works

A draw schedule explains when renovation funds are released. Instead of providing the full rehab budget upfront, the lender releases money in stages as work is completed. This is also referred to as a loan draw schedule or draw schedule in construction lending. It is standard practice for rehab and renovation loans because it ensures funds are used as planned while keeping projects moving forward.

For example, funds may be released after framing is complete, after mechanical work is finished, after drywall and finishes are installed, and at final completion. An inspection typically confirms the work before the next draw is released.

This matters because investors often need to pay contractors before the next draw arrives. If you don't have enough capital to bridge that gap, the project can slow down. Understanding the draw process ahead of time allows you to plan for expenses and avoid unnecessary delays.

A strong rehab lender understands how renovation projects actually work and structures funding to support a successful outcome — not just to deploy capital. A detailed budget broken down by project phase makes it easier to track progress, approve draws, and keep funds flowing as work is completed.

Unitas manages underwriting, inspections, draw approvals, and funding in-house. When a draw is approved, capital is ready to be released — providing investors with greater certainty and allowing projects to move forward without interruption.

Why Speed Matters

Traditional banks can take 30 to 60 days to close, which can be a major obstacle for fix-and-flip investors. Many opportunities involve distressed properties, off-market deals, or wholesaler contracts where sellers are looking for a fast, reliable closing. In these situations, waiting weeks for a bank's approval process can mean losing the property to another buyer who can move more quickly.

For investors, speed is often just as important as pricing. Understanding the differences between traditional financing and private lending helps borrowers choose a financing solution that aligns with the pace of their investment strategy.

How the Process Works: From Submission to Funded

Unitas is built to move. From the moment a deal is submitted, every step is handled in-house — no outside underwriters, no committee delays, no third-party bottlenecks. Here is what the process looks like from initial submission through first draw.

Timeline to expect: Most qualified borrowers go from deal submission to funded in as little as 10 business days on a complete file. Construction draws are typically funded within 2–4 business days of an approved site inspection.

Work with a Lender Who Understands the Process

When the numbers are tight and the timeline is short, experience matters. You want a lender who understands the property, the rehab budget, the draw process, and the closing timeline.

The best fix-and-flip lenders do more than provide capital. They help investors understand how much they can borrow, manage renovation funding efficiently, and move quickly when opportunities arise.

As a direct hard-money lender, Unitas can close loans in 10 days for qualified borrowers. Our team works directly with investors to structure deals, navigate draw schedules, and keep projects moving from acquisition through completion.

Whether you're tackling your first project or growing an established portfolio, having the right financing partner makes a measurable difference. In competitive markets across New Jersey, Pennsylvania, Delaware, and beyond, opportunities often go to investors who can act quickly.

Recently, Unitas financed a fix-and-flip project in Oceanport, New Jersey — providing $1.2 million in financing for the acquisition and renovation of a property with a projected after-repair value of nearly $1.4 million. The deal is a reminder that when the numbers make sense, speed and certainty matter as much as capital.

The right deal won't wait. With the right lender, you won't have to either.

If you have a fix-and-flip, bridge, or construction project in the pipeline, submit your scenario and connect with the Unitas team to discuss your financing options and learn how quickly your deal could close.