If you’re considering a fix-and-flip, the best time to find a problem with your numbers is before you make an offer, not after you own the property. I’m Bill Nicholson, and I work with real estate investors on financing for projects like these. Here’s the checklist I’d want you to run through first: purchase price, rehab scope, after-repair value, and a credible exit plan.
1. Support your purchase price with comparable sales
The asking price is a starting point for negotiation, not proof that the property is a good deal. Before making an offer, compare it with recent sales in the same market and look closely at how those properties differ from the one you’re considering.
- Find sold comparables. Look for nearby properties that have actually sold, rather than relying only on active listings or asking prices.
- Compare like with like. Consider location, property type, size, bedroom and bathroom count, layout, lot, and overall condition.
- Note meaningful differences. A renovated home isn’t a direct match for one that needs major work. Record what makes each comparable stronger or weaker.
- Check the as-is condition. Photos, an inspection, and a property walk-through can help you spot issues that affect your offer or your rehab budget.
- Calculate your full acquisition cost. Include the purchase price and the transaction costs you expect to pay. Your offer needs to work within the economics of the whole project, not just the price on the contract.
A simple comparable-sales table can keep your thinking grounded:
| Property | Sale status and date | Location | Size and layout | Condition | Sale price |
|---|---|---|---|---|---|
| Subject property | Not yet purchased | Your target area | Record key details | As-is | Proposed offer |
| Comparable 1 | Sold | Nearby | Similar or note differences | Record condition | Record sale price |
| Comparable 2 | Sold | Nearby | Similar or note differences | Record condition | Record sale price |
| Comparable 3 | Sold | Nearby | Similar or note differences | Record condition | Record sale price |
The Fannie Mae comparable-sales guidance is a useful reference for thinking about why a property is, or isn’t, a good comparison. The valuation approach for your project will depend on the lender and the specific transaction.
Your next step: Build a short comp sheet with sold properties and a proposed offer price you can explain, not just one you hope will work.
2. Build an itemized rehab scope, not a lump-sum guess
“About $50,000 in repairs” doesn’t tell you what needs to happen, what the money covers, or whether the planned work supports your finished-property value. Put your scope in writing and make it detailed enough to compare against contractor bids.
Organize the scope by room, trade, or major system. Depending on the property, that could include:
- Demolition and disposal
- Structural or framing work
- Roof, windows, and exterior repairs
- Plumbing, electrical, and heating or cooling systems
- Kitchen and bathroom work
- Flooring, drywall, paint, and finish carpentry
- Permits, inspections, cleanup, and landscaping
For each item, record the work to be done, the estimated cost, and who provided the estimate. Get contractor input where possible, and flag items that still need inspection or pricing. Keep unknowns visible instead of hiding them in a vague “miscellaneous” line.
Then check that the planned work and budget agree. If your ARV assumes a finished kitchen and updated systems, your scope should describe those improvements and your budget should account for them. Also think about sequencing: a delay in one major task can affect the rest of the schedule and your holding costs.
Before you go under contract, find out how the lender reviews renovation work and what documentation your specific project may require. For a qualifying fix-and-flip project, financing of up to 90% loan-to-cost (LTC) may be available, subject to underwriting and program guidelines. That figure is not a commitment for a particular deal, so ask how your proposed purchase and rehab will be evaluated.
Your next step: Turn your rehab estimate into a line-item scope, then compare it with contractor pricing and the finished condition you plan to deliver.
3. Support your after-repair value with the finished product in mind
After-repair value (ARV) is an estimate of what the property could be worth after the planned work is complete. It isn’t simply the highest sale price you can find nearby. Your comps should support the condition and features your scope can realistically deliver.
For each potential comparable, capture the address, sale date and price, distance from your property, size, layout, and condition. Write down the differences that matter. A property with a different layout or a much higher finish level may still provide context, but it may not be a strong one-to-one comparison.
Use a conservative approach:
- Match the comp to the scope. Don’t compare your planned basic refresh with a fully renovated property that has features your budget doesn’t cover.
- Look at several sales. One unusually high sale can distort your estimate.
- Pay attention to current competition. Active listings and recent price changes can help you understand what buyers will compare your finished project against.
- Allow for uncertainty. Your final value may differ from your estimate, and the lender’s valuation process, not your spreadsheet, will inform underwriting.
Most important, make sure the purchase price, rehab scope, and ARV tell one consistent story. If the ARV only works when every assumption goes perfectly, pause and revisit the offer.
Your next step: Prepare a comp sheet that explains why each sale is relevant and how your completed property will compare.
4. Prove the exit before you go under contract
Your exit plan is how you expect to repay the financing. Decide which path you’re pursuing before you make an offer, and identify a backup if your first choice becomes less attractive.
If you plan to sell
Estimate your likely sale price using your ARV comps, then account for the costs and time involved in bringing the property to market and completing a sale. Consider what you would do if the finished property needs another repair, takes longer to sell, or attracts offers below your target.
If you plan to refinance
A refinance may be part of a buy, rehab, rent, and refinance strategy, but it is not automatic. Gather information about your intended rental plan and ask what the future lender would need to evaluate the property and transaction. Don’t assume that renovation alone guarantees a refinance or a particular loan amount.
If you’re buying before the rehab is complete
Ask whether a bridge structure may fit the gap between acquisition and your planned exit. The right option depends on your property, project, and financing needs. Review the Emerald Capital Funding services page to compare the available program categories and discuss which may suit your project.
Once you’ve settled on an exit, check that your plan accounts for project delays. Emerald Capital Funding closings commonly run in the 14–22 day range when the file, property, and borrower meet program requirements; timing is program-dependent, not guaranteed. Loan amounts vary by program and may start at $50,000.
Your next step: Write down your primary exit, your backup plan, and the assumptions each one depends on. If you can’t explain how the project repays its financing, revisit the deal before offering.
Before you make the offer: a quick deal check
Use these four questions as your final pause:
- Purchase price: Can you support your proposed offer with relevant sales?
- Rehab scope: Is the budget itemized and aligned with the work you intend to complete?
- ARV: Do the comparable sales support the finished condition you’re planning and budgeting for?
- Exit: Can you describe how you expect to repay the financing, and what you’ll do if the plan changes?
A strong deal doesn’t require perfect predictions. It does require clear assumptions, a realistic budget, and a plan for the risks you can see today. With the right approach, you can make a more informed offer and put your project on a stronger path toward your financial goals.
Fix-and-flip financing Q&A
Q: What should I prepare before asking about financing?
A: Start with the property details, proposed purchase price, itemized rehab scope, supporting ARV comparables, and your exit plan. The lender can tell you what else is needed for your specific application.
Q: Is my ARV estimate the value the lender will use?
A: Not necessarily. Your estimate and comps help explain the deal, but the lender’s valuation and underwriting process will guide its review.
Q: Does up to 90% LTC apply to every fix-and-flip project?
A: No. Up to 90% LTC is available only for qualifying fix-and-flip projects and remains subject to underwriting and program guidelines. Ask how your particular deal will be evaluated.
Q: What if I’m not sure whether to sell or refinance?
A: Compare both paths before you commit. Outline the assumptions behind each, and speak with your financing team about the program requirements that may apply. Don’t treat a future refinance as guaranteed.
Take your next step
Bring your purchase price, itemized rehab scope, ARV comps, and exit plan to a conversation with a financing team before you make an offer. Visit Emerald Capital Funding’s services page to review the fix-and-flip program, then call 610-510-6119 or contact the team to discuss your project.
