Fix and Flip Loans for Beginners

What lenders look for with zero track record

Without prior completed flips to point to, a lender leans more heavily on the deal itself and the people around it. That means the purchase price, rehab budget, and ARV need to make sense on paper with realistic comparable sales, and the lender will want to see who is actually going to do the work.

• •A credible, itemized scope of work and rehab budget — not a round-number guess
• •A licensed general contractor or experienced partner attached to the project
• •Proof of funds for the down payment, closing costs, and a contingency reserve
• •A realistic exit plan: sell, or refinance into a DSCR rental loan
• •Credit history showing the borrower manages debt responsibly (Curlee Capital's minimum FICO is 660)

Realistic leverage for a first deal

Curlee Capital funds up to 90% of purchase plus 100% of rehab costs — no dollar cap on rehab itself, subject to overall LTARV and the $5M loan maximum. First-time borrowers use the 70% ARV tier. Five or more deals completed in the last 24 months unlocks 75%; credit does not determine this tier. The minimum FICO remains 660, and origination is 3%. No appraisal is required on fix & flip: provide property photos and a construction budget instead.

Practically, this means a first-time flipper should come to the table expecting to fund more of their own cash into the purchase and to price the deal assuming a rate toward the higher end of the 7.5%–10.95% range, then be pleasantly surprised if the actual terms come in better.

Budgeting for contingency

Every renovation budget should include a contingency line — extra funds set aside for the unknowns that show up once walls are opened. A common approach is to add 10-15% of the total rehab budget as contingency; on a $50,000 rehab, that is an extra $5,000-$7,500 held in reserve, not spent on the planned scope.

First-time flippers who skip contingency planning are the ones most likely to run out of money mid-project when a plumbing issue, foundation problem, or code-required upgrade appears. Since a fix and flip loan's rehab holdback is tied to the approved scope of work, unbudgeted surprises usually mean the investor needs to cover the overage out of pocket — so building the cushion in from day one avoids a mid-project cash crunch.

Avoiding scope creep

Scope creep is when a renovation project grows beyond its original plan — a kitchen refresh becomes a kitchen and two bathroom remodels, or 'while we're at it' upgrades keep getting added. Each addition seems small in isolation, but together they extend the timeline, consume the contingency budget, and push back the sale date, which increases holding costs (interest, insurance, taxes) that eat into profit.

The fix is discipline: lock the scope of work before the loan closes, tie draw requests to that fixed scope, and treat any desired addition as a formal change with its own budget line and timeline impact rather than an informal add-on.

Planning the exit before you start

A clear exit plan should exist before closing, not after the renovation is finished. The two most common exits are selling the renovated property on the open market, or refinancing into a long-term DSCR rental loan if market conditions or personal goals shift toward holding the property as a rental instead.

First-time investors should identify their exit and a backup exit up front. If the plan is to sell, know the target list price, the comparable sales supporting it, and a realistic days-on-market estimate for the neighborhood. If the market softens or the sale takes longer than expected, having DSCR refinance as a fallback (qualifying on the property's rental income rather than a sale) prevents a forced, discounted sale just to pay off a maturing loan.

Common first-deal mistakes

Most first-flip losses trace back to a handful of avoidable errors rather than bad luck.

• •Underestimating rehab costs by not getting detailed contractor bids before closing
• •Skipping contingency reserves and getting stuck mid-renovation
• •Overestimating ARV using comparables that aren't truly comparable in condition or finish level
• •Hiring an unlicensed or unvetted contractor to save money up front
• •Ignoring holding costs (interest, insurance, taxes, utilities) when calculating projected profit
• •Not having a fallback exit plan if the sale takes longer than expected

How to build experience and improve future terms

Every flip completed and documented builds a track record a lender can underwrite against on the next deal, which is why the first project matters beyond its own profit. Keeping organized records — before/after photos, the final scope of work, actual costs versus budget, and the sale settlement statement — creates a portfolio a lender can review to extend better leverage and pricing on the next loan.

Partnering with a licensed GC or an experienced investor on the first one or two deals, even if it means sharing some profit, is often worth it purely for the credibility and know-how it builds toward becoming an experienced borrower who qualifies for stronger terms going forward. Curlee Capital assigns every borrower, including first-timers, a dedicated Deal Advisor and provides a free written Curlee Deal Brief on the deal, which helps first-time flippers stress-test their numbers before they're committed to a purchase contract.