Three-bedroom suburban ranch

Fix-and-Flip Funding Example

Buy → renovate → sell

Buy a dated ranch for $220,000, complete a $60,000 renovation and target a $400,000 sale. The starting plan allows four months for work and two more for marketing and closing. The useful result is the profit after financing, holding and selling costs—not the gap between purchase and resale alone.

By Jaken Finance Group · November 7, 2026

Edit this funding example

Property illustration: three-bedroom suburban ranch — Property illustration for this funding example.

How this funding example works

The starting calculation follows the assumptions described above. Change inputs in the calculator to explore your own numbers. All rates, leverage, rents, cap rates and fees are planning assumptions; they do not establish an offer, appraisal or loan eligibility.

Buy the scope before buying the upside

The starting work budget covers systems repairs, interior finishes and exterior cleanup on a modest single-family home. Permits and professional expenses sit in a separate soft-cost line. The model assumes the full contingency is spent; keeping it separate makes an overrun visible rather than hiding it inside the expected resale margin.

Obtain a contractor scope, insurance quote and sold comparable package before using these inputs for a real purchase. A finished listing price is a marketing choice. It does not establish a supported sale value or the amount a lender will advance.

Make the example your own

Edit the deal. See the cash change.

Change any assumption to update the loan sizing, cash requirement and exit. Starting values are planning assumptions; actual terms require property and borrower review.

Purchase and renovation budget

Purchase price ($)

Renovation hard costs ($)

Soft costs, permits and professional fees ($)

Contingency on hard costs (%)

Acquisition closing costs, excluding loan fee ($)

Project financing and timeline

Assumed purchase-price advance (%)

Assumed work-budget advance (%)

Completed-value loan ceiling (%)

Project loan annual interest rate (%)

Origination fee on commitment (%)

Renovation months

Sale or lease-up/refinance months after renovation

Project loan term available (months)

Extension / other project financing fees ($)

Monthly carrying costs and liquidity

Monthly property taxes during project ($)

Monthly project insurance ($)

Monthly utilities during project ($)

Other monthly holding costs ($)

Unspent liquidity reserve ($)

Retained cash, separate from spent contingency. Excluded from project profit and costs.

Sale assumptions

After-repair sale price / completed-value assumption ($)

Sale commissions and percentage-based costs (%)

Additional fixed sale costs ($)

Project loan prepayment charge ($)

Starting example shown below. Inputs update automatically when JavaScript is available.

Profit after all modeled project and sale costs: $47,551
Peak liquidity required including reserve: $74,992
Net sale cash after debt payoff: $101,500
Return on cash spent, not annualized: 88.1%

Acquisition and project budget
Property purchase	$220,000
Hard costs	$60,000
Soft costs / permits	$5,000
Contingency assumed fully spent	$6,000
Eligible acquisition and work budget	$291,000
Acquisition closing costs	$8,000
Project loan origination fee	$5,380
Extension / other project financing fee	$0
Drawn-balance interest through exit	$12,569
Tax, insurance, utilities and other holding costs	$6,000
Total project cost before sale/refinance costs	$322,949

Project funding and liquidity
Modeled total loan commitment	$269,000
Acquisition loan advance	$198,000
Work funds disbursed in stages	$71,000
Cash spent at acquisition closing	$35,380
Cumulative owner cash spent before exit	$53,949
Peak cash spent before monthly reimbursement	$64,992
Unspent liquidity reserve	$10,000
Peak liquidity required including reserve	$74,992
Work months	4
Post-work sale / lease-up and refinance months	2

Sale exit waterfall
Sale price	$400,000
Selling percentage costs	$28,000
Additional fixed sale costs	$1,500
Project loan principal payoff	$269,000
Project loan prepayment charge	$0
Net sale cash	$101,500
Less cumulative owner cash spent	$53,949
Project profit before owner income taxes	$47,551
Total project and sale costs	$352,449

Inspect the monthly work, draws and cash schedule

Monthly project cash schedule
Month	Work paid	Loan draw	Ending loan balance	Interest paid	Other carry	Owner cash spent to date
1	$17,750	$17,750	$215,750	$1,733	$1,000	$38,113
2	$17,750	$17,750	$233,500	$1,888	$1,000	$41,000
3	$17,750	$17,750	$251,250	$2,043	$1,000	$44,043
4	$17,750	$17,750	$269,000	$2,198	$1,000	$47,242
5	$0	$0	$269,000	$2,354	$1,000	$50,596
6	$0	$0	$269,000	$2,354	$1,000	$53,949

Results round to whole dollars; calculations retain unrounded amounts. Retained liquidity is not a spent project cost. Initial escrow funding reduces cash available at closing and remains an asset, separate from fees. Negative cash remaining in the deal means refinance proceeds exceed cash spent; those proceeds are borrowed money. Income taxes, tax benefits and ownership distributions are excluded. The entered amortization is separate from loan maturity and the fixed-rate period.

Fund the work and the waiting period

The project loan is drawn in stages. Acquisition funds advance at closing; work is paid before equal month-end reimbursements. Interest is paid from owner cash on the beginning monthly drawn balance. No rent is credited during renovation, construction or lease-up, which keeps the project carry visible. The cash schedule includes the temporary need to pay work before receiving a draw.

The six-month starting timeline includes a sale period after the work is finished. During those final two months the full project balance is outstanding, so a marketing delay can be expensive even when the contractor is no longer on site. Increase the exit months to see interest and property carry continue.

Read the sale closing from the bottom up

The sale waterfall deducts percentage-based selling costs, fixed closing costs, the project principal payoff and an entered prepayment charge. Net sale cash still includes the return of the owner’s contributed cash. Subtract that contributed cash to identify the modeled profit before income taxes.

The retained liquidity reserve is available cash rather than a spent expense. It belongs in the funding requirement, but subtracting it as a cost would understate profit. The return shown is a project return on cash actually spent and is not annualized.

What to verify for a real property

A weaker sale price reduces profit dollar for dollar before percentage-based selling costs adjust.
An extension is subject to lender approval. The model flags a timeline longer than the entered loan term.
Draw inspections, retainage and reimbursement delays can require more temporary cash than this monthly schedule.

Use the published program parameters as the starting program reference. The OCC commercial real estate lending handbook provides general background on development and income-property lending risks; it does not set Jaken Finance Group’s terms.