Three numbers on our term sheet decide how much cash you bring to the closing table: the purchase advance, the renovation holdback, and the fees. Two of them are the same on every loan. One of them moves. This is about the one that moves.
The Three Starting Points
Our pricing page lists three purchase advances:
- 95% of the purchase price, 5% down. "Experienced operators with a strong deal."
- 90% of the purchase price, 10% down. "The most common option for most borrowers."
- 80% of the purchase price, 20% down. "For first deals or properties with extra complexity."
The page also says they are starting points, not hard lines, and that we will go slightly higher or lower depending on the deal. That sentence is doing real work, and the rest of this article is what sits behind it.
What Never Changes
Before the part that moves, the parts that do not:
- The renovation holdback. We fund up to 100% of your renovation budget on every tier, released in draws as the work is completed. A borrower at 80% on the purchase still gets the whole renovation funded.
- The 70% cap. The total loan, purchase advance plus holdback, cannot exceed 70% of our after-repair value. If the tier math and the cap disagree, the cap wins.
- The fees. The same points-and-term menu and the same $995 flat fee apply at every tier. The tier is about loan size, not price.
What Moves a File Up
Verified exits. Not a list of addresses. Settlement statements from the deals you have already sold or refinanced, which we check against the county record. Three or more verified exits, on a deal with room in it, is where 95% lives. We have gone to 100% of the purchase for repeat operators on strong deals, but that is the exception, not a tier.
Margin. Purchase plus renovation sitting well under 70% of our after-repair value gives us room to advance more of the price. A $150,000 house with a $40,000 renovation and a $300,000 after-repair value has that room. The same house at $240,000 after repair does not.
A clean file on day one. Recent bank statements, entity documents, and a scope of work with a number next to each line. A file that answers our questions before we ask them tends to land at the top of its range.
What Moves a File Down
A first deal with us, or fewer than three exits we can verify. That starts the conversation at 90%, and it can land lower. It is not a decline. It is a smaller advance on the purchase while the track record gets built, with the renovation still fully funded.
A property with extra moving parts. Well and septic instead of public utilities. More than one parcel. Anything that is not a house: a duplex, a small apartment building, a mobile home park. These are deals we do, and the purchase advance reflects the extra work in the exit.
What Each Tier Does to Your Cash
Take a $150,000 purchase with a $40,000 renovation, on our standard six-month terms at 3 points. The renovation holdback is $40,000 on every line. What changes is the purchase advance, the down payment, and the points, which are charged on the full loan.
| Tier | Purchase advance | Holdback | Total loan | Down payment | 3 points | Flat fee | Cash before interest and title items |
|---|---|---|---|---|---|---|---|
| 95% | $142,500 | $40,000 | $182,500 | $7,500 | $5,475 | $995 | $13,970 |
| 90% | $135,000 | $40,000 | $175,000 | $15,000 | $5,250 | $995 | $21,245 |
| 80% | $120,000 | $40,000 | $160,000 | $30,000 | $4,800 | $995 | $35,795 |
The points and the fee come out of our wire, so what you bring is the down payment plus those amounts, plus interest to the end of the closing month and whatever the title company collects. The line-by-line version of that check is in Cash to Close in Virginia.
Between 80% and 95% the down payment moves by $22,500. The points move the other way by $675, so the net difference in cash is $21,825 on this deal. That is the number to know before you write the offer, because it decides how many deals you can carry at once.
This Week's Example
The Westmoreland County ranch we funded on October 15 landed at 85%: $72,250 at closing on an $85,000 purchase, plus the full $80,000 renovation in draws. First loan with us, so nothing to verify yet on the track-record side. Strong on the margin side: purchase plus renovation came to 66% of our $250,000 after-repair value. The two pulled in opposite directions, and 85% is where they met. The full deal is in the case study.
How to Move Up Before Your First Email
You do not have to guess your tier. Send three things with the deal:
- Settlement statements from your last exits, as many as you have.
- Your last two or three months of bank statements for the entity that will take title.
- The scope of work, with a dollar figure next to every line and a contingency line at the bottom.
With those in hand we can tell you the purchase advance and the cash to bring in the same conversation, before you are under contract. Every loan we have funded is on /funded-deals. Send yours through the Discuss My Deal form or call 804-208-0465.