Updated Rates as of August 2026
First-time investors can get hard money when the deal stands on its numbers — conservative ARV, realistic rehab, and a credible exit. Expect lower leverage than repeat sponsors until you have a track record.
Bring a licensed contractor or detailed SOW, proof of reserves, and entity docs ready at submission. Solutions for new investors
First-deal file checklist
| Item | Why underwriters require it |
|---|---|
| Detailed scope of work | Proves rehab budget is realistic |
| Licensed GC bid or contract | Execution credibility |
| Conservative ARV comps | Lender ARV may be below your pro forma |
| Entity docs ready | LLC formed before close |
| Liquidity proof | Gap + 3–6 months IO |
First-time sponsors typically see 85% LTC and 70% ARV cap — not 100% LTC. Jaken Finance Group funds first deals in focus markets when numbers work.
First deal vs repeat — leverage comparison
| Metric | First deal | 5+ exits |
|---|---|---|
| LTC | 85% typical | Up to 90–100% qualified |
| ARV cap | 70% | 75% |
| Rate within band | Mid-to-upper 8.99%–13.5% | Repeat pricing |
| Close speed | 7–10 days if file complete | Same |
Solutions for new investors · fix and flip for beginners · fix and flip calculator
Team members that strengthen first-deal files
| Team role | What lender wants |
|---|---|
| Licensed GC | Fixed-price contract or bid |
| Real estate attorney | Title review (focus states) |
| Insurance agent | Binder before close |
| Realtor | ARV comp support |
| CPA | Entity setup |
First-time sponsors with strong local team close faster than repeat sponsors with incomplete files.
Common first-deal mistakes
| Mistake | Fix |
|---|---|
| ARV inflated 15%+ | Cut ARV to lender number |
| Rehab budget missing line items | Use detailed SOW |
| No contingency line | Add 10% of rehab |
| Personal name on contract | Assign to LLC before close |
Jaken Finance Group funds first deals in focus markets at 8.99%–13.5% IO when numbers work. New investors hub · red flags lenders
First-deal file that actually closes in 10 days
First-time sponsors win approval when the paperwork matches an experienced operator:
- Conservative ARV — use lender comp pull, not Zestimate
- Line-item SOW with 10% contingency
- Contractor bid or GC letter on rehab over $50K
- LLC formed before application — not day before close
- Liquidity statement showing IO + overrun reserve
Pair with a local agent who prices ARV honestly — inflated pro formas kill first deals in underwriting.
Mentorship vs paid education — budget reality
Courses do not replace $60K+ liquid for a first flip in most markets. Jaken Finance Group funds first deals at 8.99%–13.5% IO when numbers work — expect lower LTC than a repeat sponsor. New investors hub · down payment · fix and flip requirements · red flags
First-deal worked example — Indianapolis ranch flip
| Line | Amount |
|---|---|
| Purchase | $148,000 |
| Rehab (kitchen, bath, flooring) | $52,000 |
| All-in cost | $200,000 |
| ARV (lender appraisal) | $268,000 |
| Max loan at 85% LTC / 70% ARV | $187,600 (70% ARV binds) |
| Cash to close + reserves | ~$28,000 |
| Rate | 11.75% IO (first-deal tier) |
| Hold | 7 months |
| Sale at $262,000 | Net ~$38,000 after finance and 8% sale costs |
First-time sponsor brought licensed GC bid, conservative ARV comps from Lawrence Township, and $35K liquid. Closed in 9 business days.
Market selection for first-time flippers
| Market | First-deal fit | Watch-out |
|---|---|---|
| Indianapolis | Strong SFR inventory, moderate basis | Thin spreads on near-Eastside duplexes |
| Atlanta | High volume, fast resale | Insurance on older stock |
| Charlotte | BRRRR-friendly rents | Appraisal turn time |
| Chicago | High spreads on two-flats | RLTO, permit delays |
| Florida | Speed to close wins deals | Insurance and flood zone diligence |
Start in a market where you have boots on ground — a local agent, GC, and insurance agent matter more than national average rehab costs.
First deal vs third deal — what changes
| Factor | Deal 1 | Deal 3+ |
|---|---|---|
| LTC | 85% | Up to 90–100% qualified |
| ARV cap | 70% | 75% |
| Points | 2–3 typical | 1–2 with track record |
| Appraisal type | Full interior | Hybrid / BPO possible |
| Close speed | 10–14 days | 7–10 business days |
Document every HUD-1 from deal one — repeat pricing on deal three requires proof, not claims.
Red flags that kill first-deal approval
- ARV based on highest comp in zip while subject needs full gut
- Rehab budget with no contingency line
- Contract in personal name with no LLC assignment path
- $8K liquid and request for 100% LTC
- Scope includes unpermitted additions
Fix these before application — resubmits add 5–7 days per cycle on 8.99%–13.5% IO files.
Partnering on your first deal — when a co-sponsor helps
First-time sponsors sometimes close faster with a minority partner who has documented exits. The partner does not need to be on title day one — but the guarantor with flip history often unlocks 88%–90% LTC instead of 85%. Structure matters:
| Structure | First-timer role | Partner role | Lender view |
|---|---|---|---|
| 50/50 JV LLC | Operations + local team | Guarantor with HUD-1s | Stronger leverage tier |
| Subcontractor flip | You find and manage | GC partner with license | Execution credibility |
| Mentorship shadow | You fund 100% | Mentor signs guaranty only | Rare — verify arm’s length |
Never put a partner on the note without a written JV agreement covering draw authority, sale proceeds split, and default remedies. Lenders care about guarantor strength — not handshake promises.
Contractor vetting checklist for first-time flippers
Underwriters read your contractor choice as execution risk:
- License verification — state database pull, not a business card
- Insurance certificate — GL minimum $1M, workers comp if employees
- Three references with phone numbers from recent rehabs
- Fixed-price bid tied line-for-line to your SOW
- Payment schedule matching lender draw milestones — no 50% upfront
- Lien waiver language in the contract before first draw
A licensed GC on a first deal in Indianapolis or Atlanta often replaces two years of claimed “experience” on the application.
Suburban vs urban — first-deal geography decision
| Geography | First-deal advantage | First-deal risk |
|---|---|---|
| Suburban SFR (Lawrence, Decatur) | Predictable comps, faster resale | Thin margin if you over-improve |
| Urban infill (Englewood, Old Fourth Ward) | Higher gross spread | Permit, insurance, appraisal variance |
| Inner-ring duplex | Two revenue streams at DSCR exit | First-timer scope creep on two kitchens |
Pick one municipality and learn its permit portal, typical DOM, and insurance carriers before you chase a “hot” market on social media. Jaken Finance Group funds first deals where the file is complete — not where the Instagram hype is loudest.
First-deal decision table — go or wait
| Signal | Go now | Wait and build capital |
|---|---|---|
| ARV spread after 70% cap | 22%+ | Under 18% |
| Liquid reserves | $45K+ on $200K all-in | Under $35K |
| GC or detailed SOW | Yes | No |
| LLC formed | Yes | Personal name on contract |
| Local agent + insurance quote | Yes | Out-of-state absentee |
Waiting one quarter to save $15K in reserves beats closing a first deal that stalls at draw three because cash ran out.
Pre-qualify for your first hard money file · (833) 264-7776