Investor guide · November 4, 2026

Fix and Flip Loans in New Jersey: LTC, ARV and Draws Explained

A fix and flip loan, often called a hard money or private money loan, is short-term financing to buy a property that needs work, renovate it, and then sell it or refinance it. In New Jersey, where much of the housing stock is older, these loans fund a large share of investor rehabs. Here's how they're sized and what lenders want to see.

The two parts of a fix and flip loan

Purchase money funds at closing and covers part of the purchase price.
Rehab money is held back by the lender and released in draws as work is completed and inspected.

You typically pay interest only on the amount drawn, and the full balance is due at maturity, usually within 6 to 24 months depending on the program. Most borrowers pay it off by selling the property or refinancing into a long-term rental loan.

The three numbers that size your loan

Loan-to-cost (LTC): the loan as a percentage of purchase price plus rehab budget.
Purchase leverage: the share of the purchase price the lender funds at closing.
After-repair value (ARV): the appraiser's estimate of the value once the renovation is done. Lenders cap the total loan at a percentage of ARV.

The lender applies all of its limits and lends the lowest result.

Illustrative example (round numbers, not Lendiqo's terms): - Purchase price: $200,000 - Rehab budget: $60,000 - ARV: $350,000 - Suppose a program funds 90% of purchase, 100% of rehab, capped at 75% of ARV. - Purchase portion: 90% × $200,000 = $180,000 - Rehab portion: 100% × $60,000 = $60,000 - Total by cost: $240,000 - ARV cap: 75% × $350,000 = $262,500 - Loan = $240,000 (the lower number). You bring the remaining $20,000 of the purchase price, plus closing costs and any points.

If the ARV came in at $300,000, the cap would be $225,000, and you'd need to bring $15,000 more.

How draws work

You complete a stage of work (for example demolition, rough-ins, or finishes) using your own funds or the first draw.
You request a draw.
The lender's inspector visits or reviews photos and confirms the work.
The lender releases the funds for that stage.

Ask every lender: How fast are draws funded after inspection? Is there a fee per draw? Can the first draw fund at closing?

What lenders look at

The deal: purchase price, scope of work, a line-item budget and comparable sales that support the ARV.
Your experience: completed flips or rentals. Many lenders give better leverage to experienced investors, and some lend to first-timers with lower leverage.
Credit and background: recent foreclosures, bankruptcies, liens or judgments matter more than the exact score.
Cash: your down payment, closing costs and reserves to carry the project.
Your entity: the loan is made to your LLC, usually with a personal guarantee.

New Jersey-specific planning

Certificate of occupancy at resale. Many NJ towns require a CO or continued CO inspection before a property can be sold or re-rented. Build the inspection and any required repairs into your timeline.
Permits. Pull permits through the municipal construction office. Unpermitted work can hold up the sale or the CO.
Lead-safe rules if you'll rent instead of sell. If the property was built before 1978 and you rent it out, New Jersey's lead-safe law may require an inspection.
Exit plan. If you plan to keep the property, line up the long-term DSCR refinance before you close on the hard money loan, and ask about seasoning requirements.

Before you make an offer

Get pre-approved so you can show proof of funds.
Have a contractor's written scope and budget.
Pull 3–5 sold comps that support your ARV.
Confirm your LLC is in good standing.

Fix and flip loans from Lendiqo

Lendiqo funds purchase and rehab loans for 1–4 unit investment properties across New Jersey, from our office in Lawrence Township. Program terms: purchase leverage [CONFIRM: Fix & flip max % of purchase (current site: 90%)], rehab funding [CONFIRM: Fix & flip % of rehab funded (current site: 100%)], ARV cap [CONFIRM: Fix & flip max % of ARV (current site: 70%)], term [CONFIRM: Fix & flip term], prepayment [CONFIRM: Fix & flip prepayment (current site: none)].

Next step: See fix and flip loan details or get pre-approved.

Business-purpose loans only. Not available for owner-occupied property. All loans subject to underwriting, appraisal and approval. General information, not legal or tax advice.

By the Lendiqo team. [CONFIRM: Blog author byline and Alex's review of each article before publishing]