You underwrote the spread, signed the contract, and lined up fix-and-flip financing — then the lender declined the file, slashed LTC after reviewing your scope, or went quiet before wire. Fix-and-flip rescues are common because rehab files have moving parts: ARV, budget, draw schedule, and exit all get stress-tested late.
Why fix-and-flip financing fails
| Failure point | Typical trigger |
|---|---|
| ARV / appraisal | Comps or condition support lower after-repair value |
| Scope review | Budget too thin, missing line items, or scope mismatch |
| Leverage | LTC above what ARV cap allows (often 70–75% ARV on qualified files) |
| Experience | First flip or thin track record with a conservative shop |
| Liquidity | Reserves insufficient for closing costs and interest carry |
| Timeline | Lender cannot close inside your contract window |
The original term sheet shows what leverage and pricing you lost — upload it on the Second Look form.
What can change on a rescue pass
- Lower LTC with more sponsor cash in — still profitable if purchase was right
- Different lender with experience-friendly tiers or alternative comp standards
- Bridge structure if the plan shifted from flip to hold
- Gap or second position when purchase financing works but equity gap remains
Run your numbers at realistic leverage before submitting — rescue lenders still underwrite the deal, not the hope.
When the flip is still saveable
The deal survives when:
- ARV minus purchase, rehab, sale costs, and carry still shows acceptable profit at rescue leverage
- Scope is documented and credible
- You can close within the contract window once the file is complete
See fix-and-flip loan requirements for baseline program parameters.
Submit your flip for Second Look
- Contract and property address
- Scope, budget, and ARV support
- What went wrong with the original financing
- Original approval or term sheet upload
- Closing deadline
How fix-and-flip financing fell through on your file
Fix-and-flip financing fell through when at least one underwriting pillar broke: purchase price vs. ARV, rehab scope credibility, sponsor experience, liquidity, or timeline. Unlike a rental DSCR file, flip loans stress-test exit via sale — so ARV comps and rehab budget get second-guessed late.
Common late-stage triggers:
- Scope review finds missing line items — HVAC, roof, foundation — that shrink net spread after draws
- ARV appraisal comes in below the value the term sheet assumed
- LTC cut after final committee review adds cash the sponsor cannot deploy
- First lender cannot hit your contract close date despite prior assurances
When real estate financing fell through on a flip, the rescue question is whether spread still works at achievable leverage — not at the leverage lender #1 promised.
Asset-based underwriting on rehab deals
Fix-and-flip rescue uses asset-based underwriting: ARV, loan-to-cost, draw schedule, and resale liquidity drive approval. Credit is reviewed; collateral and exit carry the file. Sponsors declined for “experience” at one shop may qualify at another with first-deal-friendly tiers if the numbers work.
Document scope line-by-line. Vague budgets get declined twice. Include contractor bids, photos, and comp support lender #1 already collected — rescue moves fastest when diligence is done.
Draw schedule and carry after rescue
A rescued fix-and-flip file still needs interest carry through rehab. Underwrite:
- Total project cost at rescue LTC
- Interest-only carry months at quoted rate
- Sale costs and holding costs to exit
- Minimum spread after all-in costs
If the spread survives at rescue leverage, submit. If only 95% LTC made the deal work and no shop will exceed 85%, the economics — not the lender — are the problem.
Bridge loan denied as an alternative path
Some sponsors pivot when fix-and-flip leverage fails. A bridge loan denied on a light value-add file may succeed as hold-and-refi if rental income supports DSCR after stabilization. Conversely, a rental bridge that failed DSCR may rescue on true fix-and-flip terms if the exit is sale, not hold.
Second Look routes the file to the product that matches the actual plan — not the product lender #1 assumed.
Speed: 7–10 business days on complete files
Qualified complete rescue files often close in 7–10 business days. Inside 48 hours of contract expiration, call (833) 264-7776 after submitting with contract, scope, ARV support, entity docs, bank statements, and the original term sheet showing what failed.