🚀 The Fix & Flip Funding Playbook: Blueprint to Real Estate Profit!

A Tribune Funding Exclusive Guide

You’re an entrepreneur, right? You see a crumbling house and you don’t see a disaster; you see a bankable canvas. You’re ready to put in the work, but there’s one problem holding back your next—or first—deal: the money.

Forget the old-school banks! This is a playbook to understand and qualify for the fast, flexible capital that successful fix-and-flippers use to dominate the market. We’re cutting through the BS and giving you the blueprint.

🤯 The Mindset Shift – Why Traditional Loans Are Dead to Flippers

Let’s get one thing straight: your local bank loan is not a fix-and-flip loan.

Traditional mortgages are slow, bogged down in paperwork, and designed for long-term homeowners. They see risk; we see opportunity. In the fix-and-flip game, speed is everything. A two-month closing means losing the deal to the investor who can close in two weeks.

Your financial foundation in flipping isn’t built on a 30-year amortization schedule; it’s built on a short-term, asset-driven strategy. This is where the right kind of funding—the kind that respects the After-Repair Value (ARV) of your project more than your last tax return—comes into play.

• Traditional: Slow, low leverage, focuses on borrower income.
• Fix & Flip Funding: Fast, high leverage, focuses on property potential (ARV).

You gotta shift your brain from borrower to asset manager. The property is the collateral, and its potential profit is your qualification. That’s the Tribune Funding difference.

💰 The Fix & Flip Funding Ecosystem – The 4 Core Players

Not all money is created equal. When you’re flipping houses, you need to know the players, what they offer, and what they demand. Stop trying to fit a square deal into a round hole!

1. Hard Money Loans (The Speed Demon)

This is the King of the Flip. Brokers (like Tribune Funding) connect you with private companies that focus primarily on the asset’s value and the speed of the deal.

🎯 Why you want it: You found an incredible deal that needs to close NOW, or the property is in such rough shape that a bank won’t even look at it.

2. Rehab/Bridge Loans (The All-in-One Solution)

Often used synonymously with Hard Money, a true fix-and-flip or rehab loan is structured to cover both the acquisition (purchase price) and the renovation costs (rehab funds) in a single loan.

• Structure: They fund the purchase upfront, but the rehab money is held in an escrow account and released in draws as you complete work stages.
• The Key Metric: Lenders typically fund up to a percentage of the Loan-to-Cost (LTC) and a maximum of the Loan-to-ARV (After-Repair Value).

3. Business Line of Credit (The Experienced Investor’s Buffer)

If you’re already successful, a Business Line of Credit (LOC) offers a revolving fund of capital. They will underwrite the deal before funding deals, but with one qualification, usually based on your existing portfolio equity.

• Use Case: Ideal for minor, unexpected repairs, bridging gaps between draws, or covering short-term carrying costs.
• Advantage: You only pay interest on the money you use. It’s your financial safety net and cash flow management tool.

4. Private Money (The Untapped Gold Mine)

These are loans from private individuals—friends, family, or your professional network—not institutional lenders.

• Why it’s great: Terms are extremely flexible and negotiable. They’re investing in you and your track record, not just the asset.
• The Hustle: Requires strong people skills and the ability to sell your deal and your vision. This is the Gary Vaynerchuk level of funding.

✅ Qualifying for the Capital – The Fix & Flip Metric Map

Forget your W-2; fix-and-flip lending speaks a different language. To qualify, you should master the Three Pillars of Approval.

Pillar 1: The Property’s Profit Potential (ARV)

This is the most critical factor. Lenders care most about what the property will be worth after you fix it up and sell it.

• After-Repair Value (ARV): The projected market value of the property once all planned renovations are complete.
• Loan-to-ARV (LTARV): This is your lender’s maximum risk cap. If a lender has a max LTARV of 70%, and your ARV is $400,000, the maximum loan amount is $280,000 ($400,000 x 0.70). Your loan cannot exceed this number.

Pillar 2: Skin in the Game (LTC)

Lenders want to see you’re committed. That means you need to contribute some of your own capital.

• Total Project Cost (Cost): Purchase Price + Renovation/Rehab Budget + Closing Costs.
• Loan-to-Cost (LTC): Compares the loan amount to the total project cost. Lenders often fund up to 85-90% of the LTC.
  • Example: If the Total Cost is $300,000 and the lender funds 85% LTC, your loan is $255,000. You must bring the remaining $45,000 to the table (your down payment and “skin in the game”).

ARV – Projected Sale Price – Sets the maximum loan size.

LTC – Loan Amount / Total Cost – Determines your cash down payment and commitment.

Rehab Budget – Detailed cost of work – Verifies the amount needed for the draw fund.

Pillar 3: Borrower Experience and Financial Profile

While fix-and-flip loans are asset-driven, your personal profile still matters—it dictates your rate and leverage.

The Tribune Takeaway: Focus on the deal first. A great deal makes everything else easier. A clear, realistic renovation plan and a strong ARV justification (comps!) are your golden tickets.

🛠️ The Draw Process – The Rehab Funding Flow

You’ve closed! You have the keys! But the rehab money isn’t just wired to your bank account—it’s controlled by the lender in a holdback or escrow account to protect everyone involved.

1. The Scope of Work (SOW)

Before you close, you submit a detailed Scope of Work (SOW) and budget. This document itemizes every repair and its cost. This is the contract for the rehab funds.

2. The Draw Request

As you complete a significant stage of work (e.g., Demolition, Framing, Mechanical Rough-In), you submit a draw request to the lender.

3. Inspection & Funds Release

• The lender sends an independent inspector to the property to verify that the work outlined in the draw request has been 100% completed.
• Once confirmed, the lender releases the funds for that completed stage to you or your contractors, reimbursing your costs.

🚨 Pro Tip: Some lenders offer “As-Disbursed” interest, meaning you only pay interest on the money you’ve drawn—a huge cash flow advantage!

🔥 Your Next Move: The Tribune Funding Advantage

You’ve got the knowledge. Now, what’s your move? The key to building a fix-and-flip empire is a lending partner that understands speed and leverage. That’s why you need Tribune Funding.

We’re not a slow bank. We represent asset-based lenders laser-focused on getting you the capital to close the deal before the competition even gets their application signed.

Stop guessing and start closing.

• You have a playbook. (Check!)
• Analyze your first deal. (Find those comps and calculate your ARV!)
• Contact Tribune Funding. (Let’s turn your ARV projection into reality!)

Disclaimer: This is an educational guide. All loan terms, rates, and qualification criteria are subject to change and depend on the specific project and borrower profile. Tribune Funding does not offer financial or legal advice. Consult a professional before making any investment decisions.