Fix & Flip Financing Case Study: How an $825,000 Loan Can Be Structured at 75% LTCReal estate investors often hear lending terms like LTC, LTV, ARV, interest-only and leverage without seeing how those numbers actually fit together on a real deal. This case study walks through an anonymized investor financing scenario using an $825,000 proposed fix-and-flip loan, structured at up to 75% loan-to-cost and approximately 63.5% of projected after-repair value. The purpose is not to suggest that every investor will receive these terms. It is to show how lenders think through leverage, value, project cost, interest carry and exit strategy before approving a short-term real estate investment loan.
Important: This is an educational underwriting example based on an investor financing scenario. Final terms vary by lender, borrower experience, liquidity, credit profile, property type, appraisal, scope of work, market conditions and exit strategy. Nothing in this article constitutes a commitment to lend.
The Proposed Loan Structure
On paper, that looks straightforward. But the important part is understanding what those numbers mean together. What 75% LTC Actually MeansLoan-to-cost, or LTC, compares the loan amount to the total eligible project cost. If an $825,000 loan represents 75% of the total project cost, the implied project cost is approximately: $825,000 ÷ 75% = approximately $1,100,000 In other words, the lender is not financing 100% of the project. The investor still has meaningful equity in the transaction. That equity may come from cash invested into the purchase, renovation costs, closing costs, prior property equity or another lender-approved source, depending on the transaction and loan program. LTC is important because it measures how much of the project's actual cost the lender is being asked to finance. Why the ARV Matters Just as MuchFix-and-flip lenders also look closely at the property's expected after-repair value, or ARV. If the proposed $825,000 loan represents approximately 63.5% of projected ARV, the implied after-repair value is roughly: $825,000 ÷ 63.5% = approximately $1.30 million That creates an additional layer of collateral protection. A lender may be comfortable with a transaction only if both sides of the equation make sense:
This is why investors should not focus only on purchase price. The lender is evaluating the entire project. The Monthly Interest CarryAt a 9.99% annual interest rate, an $825,000 fully drawn balance would generate approximately: $825,000 × 9.99% ÷ 12 = approximately $6,868 per month That figure is useful because investors often spend most of their time calculating renovation profit while underestimating financing carry. A project that takes four months longer than expected can materially change the economics. The exact payment can vary if renovation funds are held back and advanced through draws, because some programs charge interest only on funds actually advanced while others structure interest differently. Investors should confirm the lender's specific draw and interest policy before closing. Why Lenders Do Not Underwrite the Loan Amount AloneA lender reviewing this deal would generally want to understand more than the requested $825,000. The underwriting package may include:
ECF's current Fix & Flip program also emphasizes that financing is evaluated around the property, renovation and exit strategy, with leverage and structure dependent on the specific deal. The Exit Strategy Is Part of the UnderwritingShort-term investor financing is not meant to exist forever. The lender wants to understand how the loan will be repaid. Common exits may include:
A strong exit strategy should match the property and project timeline. For investors planning to refinance instead of sell, the projected stabilized value and expected rental performance become especially important. Where Deals Commonly Break DownEven a transaction with reasonable leverage can fail if another part of the deal does not hold up. Common problems include:
This is why a strong fix-and-flip deal is not simply a property with a large projected spread between purchase price and ARV. The transaction has to work from acquisition through exit. How ECF Reviews Investor DealsAt Expedited Capital Funding, we help real estate investors organize the financing request around the complete business plan. Investors can submit the core deal information for review, including:
For larger or more complicated projects, ECF also offers project advisory and real estate project management support designed to help investors evaluate whether the deal is ready for financing. LEARN ABOUT PROJECT MANAGEMENT The Takeaway for Real Estate InvestorsAn $825,000 fix-and-flip loan at 75% LTC and approximately 63.5% of projected ARV can appear conservative from a leverage standpoint, but leverage is only one part of the underwriting decision. A lender still needs to verify:
That is why sophisticated investors should approach financing as part of the deal structure from the beginning, not as something to figure out after the property is already under contract. Have a Deal You Want Reviewed?Submit your property information and financing request to Expedited Capital Funding for an initial review. REQUEST A LOAN QUOTE CONTACT ECFExpedited Capital Funding, LLC provides commercial and business-purpose real estate financing for investors. Program availability, leverage, rates, fees, terms, property eligibility and state availability are subject to change and lender underwriting. This content is for educational purposes only and is not a commitment to lend.
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