How Much for a Fix & Flip Loan Down Payment? (2026 Investor Guide)

One of the most common questions real estate investors ask is:

"How Much for a Fix & Flip Loan Down Payment?"

The answer depends on several factors, including your experience level, credit score, and the lender's financing guidelines. The good news is that many private lenders and hard money lenders can finance a significant portion of both the purchase price and renovation costs, allowing investors to preserve capital while growing their portfolios.

At Cactus Capital, financing is typically structured based on a combination of Loan-to-Cost (LTC), After Repair Value (ARV), and borrower experience.

Typical Down Payment Requirements for Fix & Flip Loans

Most fix and flip lenders evaluate deals using two key metrics:

Loan-to-Cost (LTC)

Loan-to-Cost measures the percentage of the total project cost that a lender is willing to finance.

Total Project Cost includes:

• Purchase Price

• Renovation Budget

After Repair Value (ARV)

After Repair Value is the estimated value of the property after renovations have been completed.

Most lenders will lend up to a percentage of the ARV to ensure the borrower maintains equity in the project.

For qualified borrowers, financing may be available up to:

• 92.5% of Total Project Costs

• 75% of After Repair Value

• Up to 90% of the purchase price funded at closing

As a result, many experienced investors are able to complete projects with as little as 10% down plus closing costs.

Example Fix & Flip Down Payment Calculation

Let's look at a sample transaction.

Property Details

• Purchase Price: $300,000

• Rehab Budget: $50,000

• Total Project Cost: $350,000

• After Repair Value (ARV): $500,000

Maximum Financing

92.5% of Total Project Cost:

$350,000 × 92.5% = $323,750

75% of ARV:

$500,000 × 75% = $375,000

Because lenders use the lower of the two calculations, the maximum loan amount would be:

$323,750

How Much for a Fix & Flip Loan Down Payment? (2026 Investor Guide)

Cash Required

Total Project Cost:$350,000

Maximum Loan Amount:$323,750

Investor Contribution:$26,250

In this example, the investor would contribute approximately 7.5% of total project costs, plus closing costs.

What Factors Affect Your Down Payment?

Several factors determine how much money an investor must bring to closing.

1. Borrower Experience

Experienced investors typically qualify for higher leverage because they have demonstrated the ability to successfully complete renovation projects.

2. Credit Score

Credit score plays an important role in determining borrower eligibility and loan structure.

Higher credit scores often result in greater financing flexibility and more favorable loan terms.

Borrower Tiers and How They Affect Your Down Payment

One of the most important factors in determining leverage is the borrower's experience and credit profile.

At Cactus Capital, borrowers are generally categorized into three tiers.

Tier 1 Borrowers

Tier 1 borrowers have:

• At least 3 completed fix and flip projects within the previous 36 months

• Minimum 600 FICO score

Tier 1 borrowers may qualify for:

• Up to 92.5% LTC

• Up to 75% ARV

These borrowers typically receive the highest leverage available and often require the least amount of cash to close.

Tier 2 Borrowers

Tier 2 borrowers have:

• 1 to 2 completed investment projects within the previous 36 months

• Minimum 660 FICO score

Tier 2 borrowers may qualify for:

• Up to 92.5% LTC

• Up to 70% ARV

Because ARV leverage is lower than Tier 1 financing, borrowers may be required to bring additional funds to closing depending on the project's numbers.

Tier 3 Borrowers

Tier 3 borrowers have:

• No prior fix and flip experience required

• Minimum 680 FICO score

Tier 3 borrowers may qualify for:

• Up to 85% LTC

• Up to 65% ARV

This program allows newer investors to enter the fix and flip business while still accessing professional real estate financing.

Why Your Experience Matters

As investors complete projects and build a track record, they often become eligible for higher leverage programs.

Moving from Tier 3 to Tier 2 or Tier 1 can provide:

• Higher ARV leverage

• Reduced cash-to-close requirements

• Greater purchasing power

• Increased flexibility when evaluating deals

For many investors, building a successful track record is one of the most valuable assets they can develop.

Can a Fix & Flip Loan Cover Renovation Costs?

Yes.

Many fix and flip lenders finance both the acquisition and renovation portions of a project.

Rather than funding all renovation dollars upfront, lenders typically establish a rehab holdback account and release funds as work is completed.

This allows investors to preserve cash while completing renovations.

Do First-Time Flippers Need More Money Down?

Not necessarily.

While first-time investors may qualify for less leverage than experienced borrowers, many lenders offer programs specifically designed for borrowers with strong credit and a well-structured project.

Factors that can improve approval chances include:

• Strong credit

• Adequate liquidity

• Detailed renovation plans

• Reasonable ARV projections

• Qualified contractors

How Cactus Capital Helps Investors Finance Fix & Flip Projects

Cactus Capital provides financing solutions for:

• Fix & Flip Projects

• Rental Properties

• DSCR Loans

• Bridge Loans

• Multifamily Investments

• Ground-Up Construction

• Commercial Real Estate

Whether you're purchasing your first investment property or expanding an established portfolio, our team can help structure financing that aligns with your investment goals.

Get a Fix & Flip Loan Quote

Wondering how much money you'll need for your next project?

Use the Cactus Capital Instant Quote Tool or contact our team for a customized loan analysis.

We'll review your:

• Purchase Price

• Rehab Budget

• After Repair Value

• Experience Level

• Credit Profile

and provide a preliminary financing scenario to help you evaluate your next investment opportunity.

Looking at a deal right now? Contact Cactus Capital today to discuss your financing options.