How much cash do you actually need for a fix & flip?
Down payment is the smallest part of it. Here is the whole list.
Biscayne Lending 2 min read
"90% financing" sounds like you need 10%. You need considerably more, and the gap is where first-time flippers get into trouble. Here is the whole list on a real deal.
The deal
Purchase $300,000. Renovation $60,000. After-repair value $500,000. A lender at 90% of cost and 75% of ARV, 11.5% interest-only, 2 points, eight months.
The loan is the lower cap: 90% × $360,000 = $324,000.
Every dollar you need
| What | Arithmetic | Cash |
|---|---|---|
| Your share of cost | $360,000 − $324,000 | $36,000 |
| Points | 2% of $324,000 | $6,480 |
| Closing costs in | ~1.5% | $4,900 |
| First renovation draw | before reimbursement | $10,000–$15,000 |
| Carrying costs | 8 months × $3,105 | $24,840 |
| Contingency | 10% of renovation | $6,000 |
| Total | about $88,000–$93,000 |
Against a "10% down" expectation of $36,000. That is the trap.
Why the draw matters so much
The renovation money is released in stages, after inspection.
You pay the contractor first and get reimbursed afterwards. So you float every stage. With a four-stage schedule you need enough cash to be ahead of the lender at all times, not just at the start.
Carrying costs are not optional
The loan accrues from day one, whether or not the kitchen is finished. Eight months at $3,105 is $24,840. If the project runs to twelve months — and projects run long — that is $37,260. Permits, weather and a contractor who takes another job are ordinary, not unlucky.
The contingency is the part that saves you
Ten per cent of the renovation, untouched, is the difference between discovering the panel needs replacing and being stuck with a half-finished house. Every experienced flipper has a story about the thing they found behind a wall.
Can you reduce the cash?
Some, honestly:
- A lower purchase price cuts your share of cost and every percentage-based fee at once.
- More experience earns better leverage over time.
- A cheaper renovation cuts the amount you float — if it does not cut the ARV.
And some ways that are not really reductions: a partner (you are selling equity), or a second-position loan (expensive and many first lenders forbid it).
The honest test
If the full list above is more than your available cash, the deal is too big — not the financing wrong. The next one will be there.
Run your own numbers — the flip calculator shows both caps, the full cash requirement and what is left at the end. Then send us the deal.
What next
Ready to do something with this?
Apply for financing in a few minutes, or join Biscayne Broker and put deals like this in front of lenders yourself.
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General information, not legal, tax or financial advice. Loan terms come only from a lender, in writing, after underwriting. Licensing and compliance rules differ by loan type and state.