Fix and Flip Loan Calculator

How a fix-and-flip loan is put together

On a flip, the lender's money doesn't arrive all at once. Part of the loan pays toward the purchase at closing: the acquisition advance. The rest is the rehab holdback, set aside for the renovation and paid out in draws as the work gets done. The calculator settles the total first, then splits it:

1. Cap the total loan. The lowest of the limits you turn on wins: LTC on purchase plus rehab, LTARV on the after-repair value, As-Is LTV on today's value, and the financed project cost (purchase price plus the share of rehab the lender funds).
2. Reserve the rehab. The holdback is the rehab budget times the rehab funded percentage, unless the loan is smaller than that. It comes off the top.
3. Send the rest to the purchase. What's left is the advance. The borrower covers the rest of the price, plus points, the lender fee and any interest reserve.
4. Start interest as money goes out. With funded-balance interest, interest runs on the advance from closing and on each draw from its date.

The order matters. Because the holdback is carved out before the purchase money, a bigger rehab budget on the same loan means a smaller advance and more borrower cash at closing. The limits decide how large the loan can be; the rehab funding percentage decides how it's split.

Holdback, advance and what the borrower funds

A flip borrower puts in cash at three different moments, and only the first shows up at the closing table:

• At closing: the part of the price the advance doesn't cover, plus points, the lender fee and any interest reserve. That's the cash to close estimate.
• During the project: any rehab the lender doesn't fund. At 100% rehab funding there's none; at 80%, the borrower pays a fifth of the budget from their own funds.
• Between draws: work that has to be paid for before the lender reimburses it.

How draws are released

Kiavi and Anchor Loans both describe draws as reimbursements. Kiavi's guide to the fix-and-flip draw process (June 15, 2026) puts it plainly: “Each draw is generally a reimbursement: work must be completed, installed, and paid for before funds are released, with an inspection required to verify progress.” Anchor Loans' January 2022 article on construction holdbacks describes the same structure, with rehab funds held back at closing and released as work is completed and inspected.

For the lender, the inspection is what protects the holdback: money goes out against work that's already in place. For the borrower, the first phase has to be paid for before any rehab money arrives. When you enter a draw schedule, date each draw when the inspection should clear and the funds go out, not when the work starts.

Some lenders also keep back part of each draw until the end. The OCC's Comptroller's Handbook on commercial real estate lending (March 2022) says a bank in a progress payment plan “normally retains, or holds back, 10 to 20 percent of each payment.” Neither this calculator nor the app models retainage, so enter each draw at the amount actually paid out.

Interest on the funded balance

When the note charges interest only on money disbursed (often called non-Dutch interest), the balance steps up at each draw, and the calculator measures every step in days:

The day count moves the total too. Under Actual/360 every calendar day accrues 1/360 of the annual rate, so a full year collects 365/360 of the note rate: 11% works out to about 11.15%. The Actual/360 vs Actual/365 guide puts that in dollars. To see the same draws priced with interest on the full loan (Dutch interest) side by side, use the Dutch interest calculator.

Worked example: the default flip

The calculator opens on a $185,000 purchase with a $70,000 rehab budget, an as-is value of $200,000 and an ARV of $340,000. The example program allows 90% LTC and 70% LTARV with no As-Is LTV limit, funds 100% of the rehab, and prices at 11% with 2 points and a $1,295 lender fee over 9 months. Interest is on the funded balance, Actual/360, closing Nov 2, 2026.

The maximum loan is $229,500. The LTARV cap sits $8,500 above it, room this loan can't use.

Draws of $25,000 on Dec 15, 2026, $25,000 on Feb 1, 2027, $20,000 on Mar 15, 2027 bring the balance up to the full $229,500 on Mar 15, 2027, and it stays there until maturity on Aug 2, 2027. Total interest is $17,307.74. Each row is rounded for display, while the total comes from the exact sum, so the rounded rows may not add up to it to the cent.

Charged on the full loan balance instead, the same loan would carry $18,933.75 of interest over 9 months, $1,626.01 more. The app figures full-balance interest by month (loan × rate × months ÷ 12) with no day count, so the two figures differ in method as well as basis.

From the lender's side, points, the fee and funded-balance interest add up to estimated gross revenue of $23,192.74, before cost of funds, servicing and losses. The private money loan calculator opens on that view.

What changes if the lender funds half the rehab

With half the rehab funded, the financed project cost ($220,000) drops below the LTC cap and sets the loan. The holdback shrinks to $35,000, so more of the loan goes to the purchase: the advance becomes $185,000. Cash at closing falls to $5,695.00, but the borrower now pays $35,000 of the renovation themselves, and the loan reaches 110% of the as-is value because this program has no as-is limit. An As-Is LTV limit is what stops that.

Where the as-is value fits

With As-Is LTV off, the $229,500 loan in the example is 114.75% of the $200,000 as-is value. The acquisition advance alone is 79.75% of it. That gap between total loan and advance is where lender conventions split.

This calculator, like the app, applies every limit to the total loan. Turn on an 80% As-Is LTV limit and the whole loan is capped at $160,000. The holdback still takes $70,000, which leaves an advance of $90,000 and raises estimated cash at closing to $99,495.00.

Some lenders test the as-is limit against the money funded at closing instead. Bob Flynn of Flynn Lending wrote (April 15, 2024) that he typically doesn't like to lend more than 80% of the as-is value “at close of escrow.” Under that reading, this deal's $159,500 advance is already within $160,000, so the loan would stay at $229,500. That's our arithmetic, not the app's; the app doesn't model the advance-only convention. When a lender sizes that way, check the advance against their limit by hand, and read LTV vs LTC vs LTARV for the other definitions that change the answer.

When to use a different tool

• Dutch interest calculator: the same draw schedule priced on the full balance and the funded balance, side by side, with a step chart.
• Rehab holdback explained: total loan, advance and holdback laid out as a closing statement.
• Cash to close on a fix and flip loan: the third-party costs this estimate leaves out.
• The 70% rule vs LTARV: this flip's price is $17,000 above the 70%-rule maximum offer of $168,000 (70% of ARV minus rehab), yet LTARV isn't the cap that binds. The guide explains when LTC binds instead.
• Hard money loan calculator: opens on full-balance interest (no draw schedule) and an As-Is LTV-limited deal.