Everything Investors Need to Know About Fix & Flip Loans
Fix and flip loans (also called hard money rehab loans or house flipping loans) are short-term, asset-based financing designed for real estate investors who buy distressed properties, renovate them, and sell for profit. Sab Tera Lending is a direct Long Island-based private lender that closes fix and flip loans in as few as 7 days — critical in competitive markets where deals are won and lost by hours. We serve investors across New York, New Jersey, Connecticut, Florida, Texas, North Carolina, South Carolina, Georgia, and Alabama.
How ARV-Based Lending Works
Fix and flip lenders underwrite on the after-repair value (ARV) — what the property will be worth after renovation — rather than the current as-is value used by banks. This enables us to fund 90% of the purchase price plus 100% of renovation costs. The ARV cap (75% loan-to-ARV) is always the governing limit.
Example deal: Purchase $250,000 · Renovation $75,000 · ARV $450,000
Requested: 90% of $250K + 100% rehab = $225K + $75K = $300,000
ARV cap: $450,000 × 75% = $337,500 → $300,000 funded ✔
The 70% Rule — The Most Important Formula in Fix and Flip
The 70% rule: Maximum Purchase Price = ARV × 70% − Renovation Costs. The 30% gap covers loan costs, holding costs, selling costs (6–8% agent commissions plus closing costs), and your profit.
Example: $400K ARV × 70% = $280K − $60K rehab = $220K max offer. In highly competitive markets (NYC boroughs, Hoboken, Miami, Austin), experienced investors push to 72–75% ARV. In secondary markets, hold at 65–68%. Use the Fix & Flip Profit Calculator below to model any deal.
Understanding Holding Costs
Holding costs are the single most underestimated variable for new flippers. Monthly holding costs on a $300,000 fix and flip loan at 9.5% interest-only:
| Cost Component | Monthly Est. | 6-Month Total |
|---|---|---|
| Loan interest (9.5% I/O) | $2,375 | $14,250 |
| Property taxes (est.) | $400–$1,200 | $2,400–$7,200 |
| Insurance + utilities | $250–$500 | $1,500–$3,000 |
| Total holding cost | $3,025–$4,075 | $18,150–$24,450 |
Fix & Flip vs. Conventional Financing
| Feature | Sab Tera Fix & Flip | Conventional Bank |
|---|---|---|
| Income Verification | None ✔ | W-2 + Tax Returns Required |
| Close Time | 7–14 Days ✔ | 45–90 Days |
| Distressed Properties | Yes ✔ | Rarely Approved |
| Underwriting Basis | ARV (Future Value) ✔ | Current Appraised Value Only |
| Rehab Funding | 100% of Rehab ✔ | None |
| First-Time Investors | Welcome ✔ | Typically Declined |
| LLC Borrowing | Yes ✔ | Rarely |
| Upfront Fees to Apply | $0 ✔ | Various |
Investor Experience Tiers
| Experience Level | Max Purchase LTV | Rehab Scope | Requirements |
|---|---|---|---|
| First-Time (0 flips) | 80–85% LTV | Cosmetic to moderate | Strong deal, 660+ FICO, contractor lined up |
| Intermediate (1–3 flips) | Up to 88% LTV | Moderate to heavy | Track record unlocks better rates |
| Experienced (4+ flips) | Up to 90% LTV | Full scope incl. structural | Best pricing, fastest close |
The BRRRR Connection
The BRRRR method (Buy, Rehab, Rent, Refinance, Repeat) is one of the most powerful portfolio-building strategies available, and Sab Tera Lending supports the full cycle with one lender. Use our fix and flip loan to acquire and renovate. Once the property is tenanted or appraised at market rent, refinance into our 30-year DSCR rental loan and pull cash out to fund the next deal. No income verification at any stage. No seasoning delays. No lender-switching friction.
Fix and Flip Loans by State — All Service Markets
New York — Our Home Market
Nassau County fix and flip investors average $87K gross profit on the median deal. Suffolk County spans the full deal spectrum — entry-level Brentwood/Bay Shore flips at $300K–$450K purchase price to Hamptons luxury renovations at $1.5M–$4M purchase with $3M–$8M ARVs. Brooklyn brownstone renovations in Crown Heights and Bed-Stuy produce $250K–$600K gross profits; Park Slope and Cobble Hill full gut renovations achieve $2M–$4M ARVs. Queens two-family and three-family flips in Astoria and Woodside consistently generate $300K–$500K margins. NY fix & flip loans →
New Jersey
Hudson County (Jersey City, Hoboken, Bayonne) two-family and three-family renovations produce ARVs of $850K–$1.4M with entry prices of $400K–$650K. Essex County (Newark, Montclair, East Orange) delivers the highest transaction volume in the state — Newark entry prices of $200K–$400K with ARVs of $450K–$750K. Bergen County (Fort Lee, Edgewater, Hackensack) commands NYC commuter premium ARVs. NJ fix & flip loans →
Florida
Miami inner-city (Overtown, Little Haiti, Allapattah, Liberty City) offers purchase prices of $200K–$450K with ARVs of $550K–$1.0M after renovation. Tampa (Seminole Heights, Ybor City, College Hill) is the fastest-moving flip market in Florida. Orlando (Pine Hills, Azalea Park) provides a reliable rental exit if needed. Jacksonville delivers the highest volume of sub-$200K entry-price flips in the state. FL fix & flip loans →
Texas
Houston inner loop (Midtown, Montrose, East End, Third Ward) delivers strong ARVs relative to entry prices. Dallas/Fort Worth (Oak Cliff, South Dallas, Garland) offers the highest transaction volume. Austin's east side (East Austin, Mueller) has seen the fastest ARV appreciation in Texas. San Antonio (Southside, Eastside) provides affordable entry prices with dependable ARVs from military and healthcare buyer demand. TX fix & flip loans →
North Carolina & South Carolina
Charlotte NC is the most active flip market in the Southeast — West Charlotte (Enderly Park, Seversville) offers entry deals at $150K–$300K with ARVs of $350K–$600K. Raleigh-Durham's Research Triangle delivers pharma and tech buyer demand. South Carolina: Charleston historic district (purchase $400K–$900K, ARV $700K–$1.5M+) and Greenville industrial growth corridor (purchase $150K–$350K, ARV $300K–$600K). NC/SC fix & flip loans →
Georgia & Alabama
Atlanta's Westside corridor (Bankhead, Grove Park, Vine City) has produced 30–40% ARV appreciation since 2022 — entry prices of $80K–$180K with ARVs of $250K–$450K generating $100K+ gross profits. The BeltLine corridor (East Atlanta, Grant Park) commands premium ARVs. Alabama's Huntsville (fastest-growing Southeast city) and Birmingham (Avondale, Woodlawn) provide high-yield flips dramatically underserved by national lenders. GA/AL fix & flip loans →
Connecticut
The Fairfield County commuter belt (Bridgeport, Stratford, Milford, Ansonia) offers entry prices of $200K–$380K with ARVs of $420K–$750K driven by NYC and Stamford financial sector buyer demand. The Hartford corridor (Hartford, Waterbury, New Britain) delivers the highest transaction volume with affordable entry prices. CT fix & flip loans →