Investor financing
How do hard money and fix-and-flip loans work in Georgia?
Understand ARV, purchase leverage, rehab draws and the cash an investor may need. See a worked example and questions to ask before accepting a loan.
The short answer
Hard money and fix-and-flip loans are commonly used for short-term investment projects. A lender evaluates the property, the renovation plan, the borrower and the intended exit. The loan may fund part of the purchase and release renovation money in stages rather than all at closing.
The most useful number is not the largest advertised loan percentage. It is the amount available at each stage, compared with the cash you must spend at that stage. Map the purchase, construction and repayment together before relying on a financing proposal.
Understand the purchase and renovation pieces
A fix-and-flip loan can have an initial advance for the purchase and a separate renovation holdback. The rehab portion may be released through draws after work is completed and checked. Ask whether you must pay contractors before reimbursement and how long a draw can take.
Some programs charge interest only on funded renovation amounts; others use a different structure. A lender’s public example can help explain the mechanics, but it does not establish MaxDividend’s terms. Obtain the rules for the specific loan being offered.
Sources: Lima One Capital: an example of fix-and-flip financing mechanics
ARV is a projection, not money available today
After-repair value, or ARV, is an estimate of what the finished property may be worth. A loan may be limited by ARV and also by purchase price, project cost or other underwriting rules. If more than one limit applies, the most restrictive applicable limit can reduce the available funds.
Review the comparable sales and the proposed scope behind the ARV. A larger renovation budget does not guarantee a proportionate increase in value. If the actual resale value is lower, you still need a viable plan to repay the debt.
| Item | Amount |
|---|---|
| Purchase price | $200,000 |
| Renovation budget | $50,000 |
| Projected ARV | $320,000 |
| Hypothetical limit: 70% of ARV | $224,000 |
| Gap against purchase plus renovation | $26,000 |
The $26,000 gap excludes points, interest, closing expenses, reserves and overruns. Other loan limits may increase it. The example is not an approval or a quote.
Budget for cash timing as well as total cost
Even if the overall funding appears sufficient, the project can stall if you cannot pay a contractor before a draw. Build a week-by-week cash plan for the early work and keep a contingency reserve. Confirm inspection fees, minimum draw sizes and documentation requirements.
Ask how interest is calculated, when payments begin, and whether payments are due during a construction delay. One point equals 1% of the loan amount: on a hypothetical $200,000 loan, two points equal $4,000. That is separate from interest and other charges.
Test the exit before taking on the loan
For a resale exit, estimate selling expenses and the time needed after construction to find and close with a buyer. For a rental refinance, test realistic rent, value and qualification requirements. A refinance is a future application, not a guaranteed extension of the first loan.
Run a delay scenario. What happens if construction takes longer, the sale price is lower or refinancing is unavailable? Ask about maturity, extensions, extension costs, prepayment terms and default provisions before signing. Short-term debt needs a repayment plan that works beyond the best-case schedule.
What to bring to a financing conversation
A useful financing inquiry explains the property and the work as well as the requested amount. Any available option depends on the property, borrower, purpose of the funds and applicable requirements. Review the written terms before relying on a rate, fee, loan amount or closing date.
- Purchase agreement or target purchase price and property address.
- Itemized renovation scope, budget and contractor plan.
- A supported ARV estimate and comparable sales.
- Expected construction schedule and sale or rental exit.
- Available cash, relevant project experience and existing debt.
- A backup plan for delays, cost overruns or a lower valuation.
Common questions
Does 70% of ARV mean I only need a 30% down payment?
No. ARV is the projected finished value, not necessarily the purchase price. Initial advances, rehab holdbacks, cost limits and closing expenses determine the cash needed at purchase and during the project.
Can a first-time investor qualify?
Requirements vary. Disclose your experience and ask how it affects the loan amount, pricing, contractor requirements and reserves. Do not assume approval from a general product description.
Does owning property mean financing is automatically available?
No. Property value and lien position are only part of the assessment. The intended use of funds, existing obligations, repayment plan and applicable requirements also matter. If a mortgage payment or foreclosure deadline is involved, continue working with your servicer and advisers while exploring options.
Sources & context
Sources checked September 26, 2026. This guide provides general information, not advice for your specific legal, tax or financing situation. Examples are hypothetical. Company purchase and loan terms must be confirmed in writing.
External lender resources explain industry mechanics. They do not establish MaxDividend’s qualification criteria, pricing or lending role.
YOUR NEXT STEP
Have an investment project in mind?
Share the property, the project and your financing needs.
Tell us about your project