The 90/100 Blueprint: How to Flip Houses with Zero Renovation Capital
Reviewed by Lisa Park, Compliance & Operations Director
What Is the 90/100 Financing Model?
Most new fix-and-flip investors assume they need deep pockets to get started. They picture writing six-figure checks for a distressed property, then dumping tens of thousands more into renovation before seeing a dime of profit. That picture is outdated.
The 90/100 financing model flips the script. Here is what it means in plain terms:
- 90% LTV on purchase — the lender covers 90% of the property's purchase price, and the borrower brings only 10% as a down payment.
- 100% of the rehab budget — the lender finances the entire renovation cost, disbursed in draws as work is completed.
Combined, this structure means you are not spending any of your own cash on renovations. Your only out-of-pocket expense on the real estate itself is 10% of the purchase price, plus closing costs and lender fees.
This is not a theoretical product. Private lenders and hard money lenders have offered 90/100 structures for years, and the model has become increasingly competitive as more capital enters the private lending space.
Why Lenders Offer This Structure
It seems counterintuitive. Why would a lender put up nearly all of the capital on a speculative flip? There are several reasons.
The Property Is the Collateral
Hard money loans are asset-based. The lender underwrites the deal, not just the borrower. If the after-repair value (ARV) supports the total loan amount with a healthy margin, the lender's risk is contained. A well-underwritten flip at 70-75% of ARV gives the lender a built-in cushion even if the borrower defaults.
Rehab Draws Are Controlled
The lender does not hand over the entire rehab budget upfront. Renovation funds are disbursed in stages — called draws — after a third-party inspector verifies that work has been completed. This means the lender is only releasing capital as real value is added to the property.
Higher Volume, Higher Returns
Private lenders earn origination fees (points) and interest on every loan. By lowering the barrier to entry for borrowers, they attract more deal flow. More loans mean more fee income and a larger, more diversified portfolio.
Experienced Borrowers Reduce Risk
Many 90/100 programs require the borrower to have completed at least one or two flips. This experience filter reduces the likelihood of rookie mistakes that blow up budgets and timelines.
A Full Deal Walkthrough
Let us walk through a realistic fix-and-flip deal using the 90/100 model to see exactly what the borrower brings to the table and what they walk away with.
Deal Parameters
| Item | Amount |
|---|---|
| Purchase price | $200,000 |
| Rehab budget | $50,000 |
| After-repair value (ARV) | $325,000 |
| Loan term | 12 months |
| Interest rate | 10.5% (interest-only) |
| Origination fee | 2 points |
| Holding period | 6 months |
What the Lender Covers
- Purchase financing: 90% of $200,000 = $180,000
- Rehab financing: 100% of $50,000 = $50,000
- Total loan amount: $230,000
What the Borrower Brings
- Down payment: 10% of $200,000 = $20,000
- Origination fee: 2% of $230,000 = $4,600
- Closing costs (title, escrow, appraisal, insurance): approximately $5,000
- Total cash to close: approximately $29,600
Notice: zero dollars of the borrower's own money goes toward renovation. The entire $50,000 rehab budget is lender-funded.
Monthly Carrying Costs
Interest-only payments on $230,000 at 10.5% = approximately $2,013/month. Over a 6-month hold, that is roughly $12,075 in interest.
Add insurance, utilities, and property taxes during the hold period, and you are looking at approximately $3,000 in additional carrying costs.
The Profit Calculation
| Item | Amount |
|---|---|
| Sale price (ARV) | $325,000 |
| Minus purchase loan payoff | -$180,000 |
| Minus rehab loan payoff | -$50,000 |
| Minus borrower's cash to close | -$29,600 |
| Minus carrying costs (6 months) | -$15,075 |
| Minus selling costs (6% agent + closing) | -$21,000 |
| Net profit | $29,325 |
The borrower invested roughly $29,600 out of pocket and earned approximately $29,325 in profit. That is close to a 99% cash-on-cash return in six months.
Scale that across two or three deals per year and the numbers become very compelling — especially since you never had to save up a separate $50,000 renovation fund.
Is This Really Zero Out of Pocket?
Let us be straightforward: the 90/100 model is not literally zero dollars out of pocket. You still need to bring:
- The 10% down payment on the purchase price
- Origination points (typically 1.5-3 points on the total loan amount)
- Closing costs (title, escrow, appraisal, inspections, insurance)
- Carrying costs during the hold period (interest payments, taxes, insurance, utilities)
What it is zero on is renovation capital. You do not need to have $50,000 or $80,000 or $120,000 sitting in a bank account earmarked for contractors and materials. The lender provides that entirely.
For many investors, the renovation budget is the biggest barrier. They can scrape together a down payment, but funding a full gut rehab on top of that is out of reach. The 90/100 model removes that barrier.
How to Maximize the 90/100 Structure
Buy Right
The model works best when you purchase well below ARV. Target properties at 65-70% of ARV before rehab costs. The wider the margin between your all-in cost and the ARV, the more profit you keep and the more comfortable the lender is with the deal.
Control Your Rehab Budget
Just because the lender is funding renovations does not mean you should gold-plate the kitchen. Every dollar of rehab still needs to be repaid. Stick to value-add improvements that drive ARV without overcapitalizing for the neighborhood.
Move Fast
Time is money — literally. Every month you hold the property, you are paying interest. A tight, well-managed rehab schedule directly impacts your bottom line. Target 3-4 months for moderate rehabs.
Have Contingency Funds
Even though rehab is financed, unexpected issues arise. Assume 10-15% contingency on top of your rehab estimate. Some lenders build this into the approved budget; others do not. Ask upfront.
Build Lender Relationships
Your first deal at 90/100 might come with higher points or a slightly lower LTV. As you build a track record with a lender, terms improve. Repeat borrowers often see reduced origination fees and faster closings.
Who Qualifies for 90/100 Financing?
Qualification requirements vary by lender, but common criteria include:
- Credit score: Minimum 650-680 (some lenders flex lower for experienced flippers)
- Experience: At least 1-2 completed flips preferred, though some lenders work with first-time flippers
- Liquidity: Cash reserves beyond the down payment (typically 3-6 months of carrying costs)
- Deal strength: The property must appraise with sufficient ARV margin
- Exit strategy: A clear plan to sell or refinance within the loan term
The deal itself matters as much as the borrower. A strong property in a solid market with realistic ARV comps can compensate for a thinner borrower profile.
Common Mistakes to Avoid
Overestimating ARV. This is the most dangerous mistake in flipping. If your ARV is inflated by 10-15%, your profit disappears and you may owe money at closing. Use conservative comps and get a professional appraisal.
Underestimating rehab costs. Get detailed contractor bids before you submit your loan application. Lenders will hold you to the approved budget. If costs run over, the overage comes out of your pocket.
Ignoring holding costs. New flippers focus on purchase price and rehab but forget about 5-6 months of interest payments, insurance, taxes, and utilities. These costs erode profit quickly on a leveraged deal.
Choosing the wrong market. Flipping works best in markets with strong buyer demand and limited inventory. Avoid areas with high days-on-market or declining values, especially when you are carrying a high-interest loan.
The Bottom Line
The 90/100 financing model is one of the most powerful tools available to fix-and-flip investors. By covering 90% of the purchase price and 100% of the rehab budget, private lenders remove the biggest capital barrier to getting deals done.
You still need skin in the game — a 10% down payment, closing costs, and the ability to carry the loan — but you do not need a separate war chest for renovations. That means you can deploy your limited capital across more deals, build experience faster, and scale your flipping business without waiting years to save up.
The math works. The model is proven. The only question is whether your next deal is strong enough to qualify.
Ready to run the numbers on your next flip? Get pre-qualified today and find out how much 90/100 financing you can access. Fast approvals, no income documentation required, and closings as fast as 10 days.
Senior Loan Officer, Fix & Flip Division
Rachel specializes in fix-and-flip and value-add financing, helping investors structure deals that maximize returns while minimizing holding costs. She has closed over 400 rehab loans across 30+ states.