Metro Atlanta has a deep supply of houses built from the 1910s to the 1970s and a large pool of buyers for renovated ones. A flip here usually means new kitchens and baths, new systems, often roof, framing and crawl space work, and a house that sells to an owner-occupant. The financing has to cover the purchase and the whole renovation, and the plan has to account for costs that are specific to Georgia.
How the loan is sized
A fix and flip loan combines a share of the purchase price with the renovation budget, and the total is capped at a share of the after-repair value (ARV).
| Purchase price | $260,000 |
| Rehab budget | $85,000 |
| After-repair value | $470,000 |
| 90% of purchase | $234,000 |
| 100% of rehab | $85,000 |
| Loan | $319,000 |
| 75% of ARV ceiling | $352,500 |
| Cash to close, before costs | $26,000 |
The rehab money is not paid at closing. It is held back and released in draws as each stage of work is inspected and completed, so you or your contractor need enough cash to start each stage.
Costs that are specific to Atlanta
- Crawl spaces and termites. Many older houses sit on crawl spaces over red clay. Moisture, sagging joists, wood rot and termite damage are common, so get a full inspection and a termite letter before you set the budget.
- Old wiring and plumbing. Knob-and-tube wiring, old panels and galvanized pipes are frequent in pre-war houses, and insurers and buyers’ inspectors will flag them.
- Trees. Atlanta’s tree protection ordinance requires a permit to remove most trees on private property, with replanting or fees. Large trees close to the house can also mean roof and foundation work.
- Property tax while you hold. Georgia taxes property on 40% of its value, and an investment property gets no homestead exemption. Carry the monthly tax in your holding costs.
- Closing costs. Georgia’s transfer tax is $1 per $1,000, usually paid by the seller. Closings are conducted by an attorney.
Permits and historic districts
The City of Atlanta and each suburban city and county run their own permit offices, and review times vary. In historic districts such as Inman Park, Grant Park, Cabbagetown, West End and Adair Park, exterior work and additions need approval from the Urban Design Commission.
The exit
Most flips end in a sale to an owner-occupant, so your after-repair value should come from recent sales of renovated homes nearby. If the market slows, a DSCR rental loan can replace the flip loan and turn the house into a long-term rental, with a cash-out refinance at up to 80% loan-to-value.
Common questions
Up to 90% of the purchase and 100% of the rehab at a 720+ credit score, within 70 to 75% of the after-repair value.
A closing attorney. Georgia closings are conducted by an attorney, who also handles the title work.
In the City of Atlanta, removing most trees on private property needs a permit, with replanting or fees.
Long enough to cover permits and the work, with a cushion. Our terms run 6 to 24 months with no prepayment penalty.