Fix-and-Flip Loans: Cash to Close, Rehab Draws, and Your Exit

A fix-and-flip financing request should explain how you will buy the property, complete the work, carry the project, and repay the loan. Axelrad Capital provides capital markets & direct lending, so the selected program's underwriting and draw structure matter alongside the headline amount. A project can have enough financing on paper and still run short of cash between disbursements.

Separate the budget into four cash needs

• At closing: your purchase contribution, settlement costs, lender charges, and any required reserves.
• During construction: contractor deposits, materials, labor, and costs incurred before a draw arrives.
• During the hold: financing payments, taxes, insurance, utilities, and other project expenses.
• At the exit: selling costs, payoff obligations, or costs and cash needed for a refinance.

Put dates beside these costs. A single project-total number cannot show whether a contractor deposit is due before the first reimbursement, or whether the planned reserve lasts if the property takes longer to sell. Timing is part of the funding requirement.

Understand what the leverage number measures

Loan-to-cost compares financing with a defined project cost. Loan-to-value compares financing with a defined property value; a rehab loan may also refer to after-repair value, or ARV. Ask what expenses and valuation are included in each ratio rather than assuming that two lenders use identical inputs.

Illustrative arithmetic: a $180,000 purchase plus a $40,000 renovation budget totals $220,000 before other costs. A hypothetical $176,000 loan is 80% of that simplified cost. The $44,000 difference does not, by itself, tell you the full cash required. It leaves out the closing, hold, and exit items above, and says nothing about when the lender releases the $176,000.

Ask how draws reach the project

Some rehab facilities reimburse eligible work after evidence of completion and an inspection. Confirm the actual arrangement before committing to a contractor payment schedule. Ask what must be paid first, which work is eligible, who orders inspections, what a complete draw request includes, and how disputes or change orders affect disbursement.

• Is any renovation money advanced at closing, or held for later release?
• Which costs must you bridge with your own cash?
• Are there inspection or draw charges, and how are they collected?
• What happens if a budget item changes or the work costs more than expected?

Make the scope of work reviewable

Use a line-item scope tied to the property's current condition. Separate essential repairs from optional improvements, identify who will perform the work, and attach the estimates behind the large items. Photographs and a clear description help a reviewer understand the project; an unsupported claim that the house needs ‘cosmetics’ does not explain the budget.

Keep a separate allowance for uncertainty. Decide which cash is available if a hidden condition appears, an inspection takes longer, or a buyer requests an additional repair. A contingency is useful only if it represents funds you can actually access, not hoped-for profit at the sale.

Work backward from the exit

For a sale, compare your expected completion and marketing schedule with the loan maturity. Recalculate proceeds after the remaining loan balance and selling expenses. For a rental refinance, review the expected rent, property condition, and prospective loan criteria before relying on that exit. Neither a future buyer nor a refinance approval is guaranteed.

Bring Axelrad the purchase contract, property details, line-item rehab budget, requested closing date, estimated completed value with its supporting rationale, and sale or rental plan. Use the Fix & Flip Loans page to start the financing review. The useful question is not simply ‘How much can I borrow?’ but ‘Can this structure fund the project through repayment?’