HOME / FIX & FLIP / RECENT LOANS / BIRMINGHAM, AL

$225K fix & flip in Birmingham, AL — 85% LTC, 11-day close

Illustrative case study modelled on typical files for this program; figures are examples, not a funded loan.

Purchase: $195,000
Renovation budget: $70,000
After-repair value: $360,000
Loan: $225,250
Loan-to-cost: 85%
Rate: 9.00%
Points: 2
Term: 12 months, interest-only
Days to close: 11
Units: Single-family
Exit: Sale

Rendering — after renovation, Birmingham, AL

THE STORY

Situation

An investor with four completed projects bought a solid 1960s ranch house in a Birmingham suburb where updated homes sell within weeks. The house needed paint, floors, a kitchen refresh and curb appeal — no structural work, no permits.

Structure

The loan funded 85% of the $265,000 total cost at 9.00% with two points, well inside the 75% cap on the $360,000 after-repair value. A clean purchase contract, a one-page scope and entity documents already on file from a prior deal put the close at 11 days.

In numbers: a $225,250 loan against $265,000 of total cost left $39,750 of borrower equity in the deal. The value test — 75% of the $360,000 after-repair value ($270,000) — sat above the loan, so cost, not value, set the size. Fully drawn, interest-only carry at 9.00% works out to about $1,689 a month, and 2 points of origination came to $4,505 at closing.

Draws

Three small draws — kitchen and baths, flooring and paint, exterior — were reviewed remotely from photos and invoices, matching the pace of a light cosmetic scope.

The file

What was in the file: the purchase contract, the itemised scope of work and renovation budget, the after-repair value estimate with comparable sales, the GC agreement with license and insurance, two months of bank statements showing the cash to close and six months of reserves, and the LLC documents and ID. The appraisal valued the house as renovated against recent comparable sales nearby. Every checklist item came back inside 48 hours, which kept the close at the fast end of the range. Title was opened on the day of application and insurance was bound before the appraisal came back. The term sheet set the final leverage and pricing against the published maximums.