Case Study: Fix and Flip Loan in Blue Springs, MO

ABOUT THE DEAL IN MISSOURI

A single-family in Blue Springs, Missouri, purchased at $320,000 to renovate and resell. The 3,354-square-foot property, built in 1987, came in $50,000 below the listing price at contract, with a comprehensive interior renovation planned across the kitchen, four bathrooms, floors, HVAC, electrical, windows, and exterior. Ridge Street Capital provided a fix and flip financing to fund the purchase and full renovation through its hard money lending program in Missouri, covering 90% of the acquisition and 100% of the $105,000 rehab budget through a draw holdback.

WHAT MADE THIS FIX AND FLIP SPECIAL

• Acquired $50,000 below the listing price at contract. The property listed at $370,000 at the time of contract, following a price reduction from $385,000 and a failed prior deal. The investor closed at $320,000. As a result, the investor entered renovation with $50,000 of additional margin built into the cost basis before drawing a single dollar of the rehab budget.
• Full-system renovation across four bathrooms, the kitchen, and every major mechanical. The $105,000 scope covers the kitchen (cabinet doors, counters, backsplash, and full appliance package), four full bathrooms, floors throughout, the upstairs HVAC unit, windows, electrical updates, and exterior paint. Ridge Street Capital financed 100% of the rehab budget through a draw holdback, which released funds as each renovation phase was completed.
• ARV of $560,000 against $425,000 in total project costs, with $55,000 in projected net profit. The $320,000 purchase plus the $105,000 renovation budget brings total project costs to $425,000 before carry costs and closing. At a $560,000 ARV, the completed renovation produces $135,000 in gross margin. Ridge Street Capital underwrote the fix and flip loan at 70.18% of that ARV, which means $393,000 of the $425,000 in project costs is financed through the loan. At a 9-month estimated hold, the deal projects $55,000 in net profit on $80,000 deployed, a 69% return on capital.

THE RESULT

The completed fix and flip loan gave the investor full purchase-and-renovation financing on a Blue Springs single-family:

• Total Loan Amount: $393,000 (12-Month Fix and Flip)
• Initial Advance: $288,000 (90% of $320,000 Purchase)
• Rehab Holdback: $105,000 (100% of Rehab Budget)
• Rate: 11.25%
• LTARV 70.18%
• ARV: $560,000
• Capital Deployed: $80,000
• Projected Net Profit: $55,000 (69% Return on Capital, 9-Month Hold)

MORE ABOUT RIDGE STREET CAPITAL

Ridge Street Capital provides fix and flip loans, DSCR rental loans, and ground-up construction financing to real estate investors across 36 states. Our focus is exclusively on investment properties, which means every deal we evaluate gets the attention of a team that has seen the full range of what makes an investment work or fail.

If you want a lender who will tell you clearly whether a deal makes sense and move fast when it does, book a call with us to check your numbers.