What spread do fix-and-flip underwriters expect after costs?

Gross spread after ~8% sale costs and IO carry at 8.99%–13.5% — target ≥15% on all-in basis before tax; stress ARV −10% and +1 month hold before you lock scope.

How does Jaken Finance Group size fix-and-flip bridge loans?

Non-owner-occupied collateral on sold comps, scope with 10%–15% contingency, and documented sale exit — up to ~90% LTC on qualified files, 7–14 business day close when the package is complete.

What is not acceptable flip financing at Jaken Finance Group?

Owner-occupied purchases, HELOC-based rehab on a primary residence, and bridge without a resale timeline — Jaken Finance Group finances business-purpose investment property only.

Blog

Thriving in the Fix-and-Flip Market with Jaken Finance Group

Published June 12, 2026 · Updated July 18, 2026

By Jason Taken · Principal, Jaken Finance Group

Fix-and-flip underwriting — ARV comps, 90% LTC at 8.99%–13.5% IO, draw milestones, spread after 8% costs, and exit discipline for non-owner-occupied flips.

Fix-and-flip is a business-purpose, non-owner-occupied strategy: acquire distressed collateral, rehab on a defined scope, sell within 4–9 months. Jaken Finance Group underwrites bridge at 8.99%–13.5% interest-only when sold comps, LTC, and exit support the file — not when ARV is anchored on actives or seller fantasy numbers. This guide covers deal selection, spread math, draw mechanics, and the package that closes in 7–14 business days on qualified acquisitions.

Flip vs hold — product at LOI

Factor	Fix-and-flip (bridge)	Buy-and-hold (DSCR)
Rate band	8.99%–13.5% IO	5.75%–10.5% permanent
Sizing	ARV, LTC	Stabilized value, DSCR ≥1.0
Exit	Sale	Long-term hold / refi
Hold target	4–9 months	Years
Collateral state	Distressed → retail-ready	Leased or turnkey

Fix and flip requirements · Fix and flip calculator · What is hard money.

Deal selection — before you write the offer

Underwriters and experienced sponsors filter the same way:

Filter	Pass	Fail
ARV support	3 sold comps within 0.5 mi, matching bed/bath/condition	Actives, pending, or Zestimate
Gross spread	≥15% after ~8% sale costs pre-carry	Thin margin at conservative ARV
Scope	Line-item budget + 10%–15% contingency	Lump-sum “$40K rehab”
Timeline	4–9 month realistic resale	Seasonal dead market ignored
Title / condition	Clearable liens, insurable	Unpermited addition without cure plan

Distressed SFR and small multifamily (2–4 units) dominate investor flip pipelines — same comp discipline, different rent/ARV reconciliation on exit.

Worked example — $220K all-in flip

Assumptions: $185,000 purchase + $35,000 rehab = $220,000 all-in. ARV $285,000. Hard money 90% LTC → $198,000 note at 10.5% IO ≈ $1,733/mo during 5-month hold ≈ $8,665 carry.

Line	Amount
ARV	$285,000
Sale costs (~8%)	−$22,800
Net sale	$262,200
All-in basis	−$220,000
Carry + closing (approx.)	−$12,000
Spread (pre-tax)	~$30,200

Stress ARV −10% ($256,500 net before costs) and +1 month carry — if spread drops below your minimum, renegotiate basis or pass.

Underwriting floors — flip metrics

Metric	Floor
Gross spread after ~8% sale costs	≥15% before IO carry
Hold period	4–9 months modeled
Scope contingency	10%–15% mandatory
LTC cap	Up to ~90% qualified
Comp radius	0.5 miles, sold only

Benefits of hard money for flipping · Master fix and flip financing guide.

Financing stack — what belongs in the file

Jaken Finance Group provides business-purpose bridge for non-owner-occupied acquisitions — not owner-occupied rehab, not HELOC on a primary residence.

Product	Role in flip	Rate band
Hard money / bridge	Purchase + rehab holdback	8.99%–13.5% IO
DSCR	Wrong product at acquisition	5.75%–10.5% — use after lease if BRRRR
Bank conventional	Too slow for distressed	30–45+ days typical

Speed wins auction, REO, and wholesaler assignment inventory — complete files beat higher offers with 45-day bank contingencies.

Draw schedule — how rehab capital releases

Rehab funds sit in a holdback account and release on inspection milestones:

Milestone	Typical release	Investor action
Closing	Purchase wire + partial holdback	GC mobilizes; order materials
Rough-in / mechanical	Tranche per scope	Submit draw 48 hrs before milestone
Drywall / finishes	Subsequent tranches	Photos + invoices in packet
Final / CO	Remaining holdback	Schedule final inspection early

Each draw takes 3–5 business days after inspection. GC cash flow must bridge between draws — sponsors who miss draw packets delay projects and burn IO.

See fix and flip draw process.

Scope and contingency — where flips fail

Scope defect	Underwriter response	Sponsor fix
No line items	LTC haircut or decline	Itemized bid from GC
0% contingency	Required 10%–15% added	Revise budget before term sheet
Unpermitted work	ARV credit until cured	Permit plan in file
Owner-builder without track record	Higher equity or experienced GC	Named licensed contractor

Scope overrun without contingency lands on equity — bridge does not automatically increase holdback mid-project without re-underwrite.

Acquisition channels — speed requirements

Channel	Close pressure	File priority
Wholesaler assignment	7–10 days	POF, entity, comps pre-loaded
REO / bank-owned	Seller certainty	No financing contingency theater
Auction	Hard date	Pre-approved sponsor, scope template
MLS distressed	Competing investors	Same-day term sheet capability
Code violation	Bank rejection	Scope cures defect; ARV post-rehab

Hard money for code violations · Bridge loans hub.

Entity vesting and insurance

Flips close in an LLC for liability and portfolio tracking:

Document	Common defect
Operating agreement	Name mismatch vs purchase contract
EIN letter	Missing
Insurance	Owner-occupied HO-3 instead of builder’s risk / vacant dwelling
Wire source	Personal account without paper trail

Investor insurance must reflect vacant / under-renovation status through CO — wrong class voids claims and delays draws.

Market and resale — exit discipline

Bridge matures; flips sell. Model exit before you close:

Exit risk	Mitigation
ARV miss	Size on conservative sold comp, not highest sale
Seasonal slowdown	Add 1–2 months carry in pro forma
Over-improvement	Match finishes to comp tier — not your taste
DOM stretch	Price reduction budget in spread model
Buyer financing market	8% all-in sale cost assumption minimum

If the only way the deal works is best-case ARV and minimum DOM, it is not underwritten — it is hope.

BRRRR crossover — when flip becomes hold

Some acquisitions start as flip and convert to BRRRR when resale softens but rent supports DSCR:

Bridge 8.99%–13.5% IO through rehab
Lease at market — executed lease, not verbal
DSCR refi at 5.75%–10.5% when DSCR ≥1.0 and seasoning met (6–12 months from note date on many programs)

Confirm refi path before bridge close — maturing bridge without lease is the BRRRR failure mode. See scale rental portfolio with DSCR.

Extension and maturity

Bridge terms run 6–18 months. Pre-negotiate extensions at origination:

Scenario	Action
Sale delayed 30 days	Extension fee + updated pro forma
Scope overrun	Equity injection or scope reduction
Market softening	Stress ARV −10% before extending
Buyer fall-through	Relist budget + carry reserve

IO at 8.99%–13.5% without a sale date is not a strategy — it is carry burn.

Risks to model honestly

IO carry — each extra month erodes spread
Scope overrun — contingency is mandatory, not optional
ARV miss — appraiser may land below pro forma
Draw delays — inspection cadence affects GC timeline
Extension fees — 0.5–1 point on thin deals
Cross-collateral — understand release terms if pledged

When flip bridge is the wrong tool

Stabilized turnkey with lease — use DSCR, not bridge
Owner-occupied rehab — outside Jaken Finance Group scope
No sold comps — cannot anchor ARV
Thin spread after 8% costs and carry — pass or renegotiate