Welcome to the world of high-leverage real estate investing. If you’re considering your first flip or looking to scale an existing portfolio, you already know that capital is the lifeblood of your business. In the competitive 2026 market, the difference between a "hobbyist" and a "pro" often comes down to how efficiently you use your cash.
At Emerald Capital Funding, we’ve seen countless investors get stuck because their capital is tied up in a single project. That’s why we’ve developed this blueprint to show you how to leverage a 90% Loan-to-Cost (LTC) structure to keep your money moving and your ROI soaring. This guide will equip you with the tactical knowledge you need to maximize your returns and minimize your out-of-pocket expenses.
What is 90% LTC and Why Does It Matter?
Before we dive into the math, let’s clear up the terminology. In the lending world, you’ll often hear two acronyms: LTV (Loan-to-Value) and LTC (Loan-to-Cost).
- LTV (Loan-to-Value): This is based on the current value or the future value (ARV) of the property.
- LTC (Loan-to-Cost): This is based on the total cost of the project, including the purchase price and the renovation budget.
When we talk about 90% LTC, we are saying that Emerald Capital Funding can provide financing for up to 90% of your total project costs. This typically includes 90% of the purchase price and 100% of the renovation budget (as long as the total loan stays within a specific percentage of the After-Repair Value).
The Power of Leverage
Imagine you find a property for $200,000 that needs $50,000 in work. Your total cost is $250,000.
- With a traditional 75% LTC loan, you’d need to bring $62,500 to the table for the project costs alone.
- With a 90% LTC loan, you only need to bring $25,000.
By keeping an extra $37,500 in your pocket, you have the liquidity to secure your next deal or cover unexpected holding costs. This is how you move from doing one flip a year to doing three or four simultaneously.
The Math: How High Leverage Maximizes Your ROI
To truly understand why 90% LTC is the "secret weapon" for pro flippers, we have to look at the Cash-on-Cash ROI. This is the actual return you get on the money you personally invested in the deal.
Let's look at a "Real Deal" scenario similar to our scaling in Norristown, PA highlight.
The Scenario:
- Purchase Price: $150,000
- Rehab Budget: $50,000
- Total Project Cost: $200,000
- ARV (After-Repair Value): $300,000
- Estimated Selling Costs/Holding Costs: $25,000
- Total Net Profit: $75,000
Case A: 75% LTC (The "Conservative" Approach)
- Loan Amount: $150,000
- Your Cash Invested: $50,000 (Project) + $25,000 (Holding/Closing) = $75,000
- ROI Calculation: $75,000 Profit / $75,000 Invested = 100% ROI
Case B: 90% LTC (The "Emerald" Approach)
- Loan Amount: $180,000
- Your Cash Invested: $20,000 (Project) + $25,000 (Holding/Closing) = $45,000
- ROI Calculation: $75,000 Profit / $45,000 Invested = 166% ROI
By using higher leverage, your ROI jumped by 66%. Even better, you still have $30,000 left in your bank account compared to Case A. With that $30k, you’re already halfway to the down payment on your next 90% LTC deal.
Tactical Steps to Secure 90% LTC Financing
Securing high-leverage financing isn't just about finding the right lender; it’s about presenting a deal that makes sense. We’ve got you covered with these specific steps to ensure your deal gets the green light.
1. Master the ARV Calculation
Lenders will fund 90% of the cost, but only if the total loan doesn't exceed a certain percentage of the ARV (usually 70-75%). You must provide rock-solid "comps" (comparable sales) that prove your renovated property will actually sell for the price you claim. If your ARV is too optimistic, your LTC percentage will be forced down to protect the lender’s position.
2. Detailed Scope of Work (SOW)
Don't just say "Renovations: $50,000." We need to see a line-item budget. This includes everything from flooring and paint to plumbing and permits. A professional SOW gives the lender confidence that you know exactly what the project requires. For a deeper dive into the math we use, check out fix and flip secrets revealed.
3. Experience Matters (But Isn't Everything)
Most lenders reserve 90% LTC for investors with at least 1-3 successful flips under their belt. However, if you are a new investor, don't worry. You can often still qualify for high leverage by partnering with an experienced contractor or by bringing a slightly higher credit score to the table.
Scaling Your Portfolio: The Velocity of Capital
Once you've mastered the single flip, the next step is scaling. The most successful investors we work with at Emerald Capital Funding don't think in terms of "profit per house," they think in terms of "capital velocity."
Capital Velocity is how quickly you can deploy your cash, get it back with a profit, and deploy it again.
When you use 90% LTC, you are reducing the "drag" on your capital. Instead of having $100k tied up in two houses, you could potentially have that same $100k spread across four or five projects. This diversification also lowers your risk; if one project hits a snag or a delay, your entire business isn't dead in the water because you have other projects moving toward the finish line.
If you find yourself with a completed flip and you aren't ready to sell yet, you can also transition that property into a long-term rental. Many of our clients use our 90-day BRRRR timeline to flip their short-term bridge loan into a permanent DSCR loan.
Common Pitfalls to Avoid in High-Leverage Deals
High leverage is a powerful tool, but it requires discipline. Before you sign on the dotted line, make sure you aren't falling into these common traps:
- Underestimating Rehab Costs: When you’re only putting 10% down, there is less room for error. A $10,000 budget overrun can eat a significant portion of your liquid reserves.
- Ignoring Holding Costs: Interest, insurance, taxes, and utilities add up every month. Speed is your best friend in a 90% LTC deal. The faster you finish, the more profit you keep.
- Over-Improving for the Neighborhood: Just because you can afford a high-end kitchen doesn't mean the neighborhood comps support it. Stick to the budget that matches the ARV. You can read more about common fix and flip mistakes here.
Q&A: Everything You Need to Know About 90% LTC
Q: Do I need a high credit score to get 90% LTC?
A: While we look at the whole picture, a credit score of 680 or higher is typically required to hit the maximum leverage of 90%. If your score is lower, we can still fund the deal, but the leverage might be closer to 80-85%.
Q: Does Emerald Capital Funding fund the rehab costs upfront?
A: Rehab funds are typically held in escrow and released in "draws" as work is completed. This protects both you and the lender by ensuring the work is done correctly before the money is spent.
Q: Can I use 90% LTC for a 5-unit multi-family property?
A: Generally, 90% LTC is for 1-4 unit residential properties. Once you cross into 5+ units, the requirements change slightly. You can learn more about that in our guide to multi-family DSCR loans.
Q: What are the interest rates for these loans?
A: Rates vary based on your experience and credit, but because these are short-term bridge loans (usually 12 months), the interest is typically higher than a standard 30-year mortgage. However, since you are only paying interest for a few months, the impact on your total ROI is minimal compared to the benefit of the leverage.
Your Pathway to Financial Security
Success in real estate is within your reach, especially when you have the right financial partner. By utilizing 90% LTC, you aren't just buying a house; you're buying the ability to grow your business at a pace that traditional banks simply won't allow.
With that said, the market moves fast. The best deals don't wait for paperwork, and neither should you. Whether you're eyeing a fixer-upper in Detroit or a renovation in Norristown, Emerald Capital Funding is here to provide the speed and leverage you need.
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Want to learn more about our specific programs? Check out our fix-flip loan basics or see how we helped other investors by visiting our real deal highlight in Detroit.
