Acquisition + rehab financing
Acquisition + Rehab Loans: Purchase and Renovation, Financed Together
An acquisition + rehab loan funds part of the purchase at closing and holds renovation money that is released as the work gets done. At Wisdom Capital that means up to 90% of the purchase price and up to 100% of hard costs, capped at 70% of after-repair value, with draws wired the same day you send photos.
The mechanics
How an acquisition + rehab loan moves from closing to completion.
Close on the purchase
The lender funds the approved share of the purchase price. The renovation budget is set aside as a holdback.
Start the work
Your contractor completes the first phase of the approved scope using your starting capital.
Request a draw
Send photos or video of the completed phase. Wisdom Capital can wire the draw the same day, with no receipts or site visit.
Exit
Sell the finished property, or refinance into long-term financing if you plan to hold it as a rental.
Why finance acquisition and renovation together
- Less cash tied up. Renovation funds come from the loan instead of entirely from your own capital.
- One lender for both. Wisdom Capital documents it as two loans, purchase and construction, with a single attorney fee of $2,350 covering both.
- The budget is agreed up front. The scope of work is reviewed before closing, so you know what the lender will fund.
Sell or hold: planning the exit
For a flip, the exit is the sale and the key number is the after-repair value. For a hold, often called BRRRR (buy, rehab, rent, refinance, repeat), the exit is a long-term rental loan, and the key numbers become the appraised value after renovation and the rent the property will support. Rental refinance lenders commonly use a DSCR test. See hard money vs DSCR for how the two loans fit together.
How draws work in practice
Wisdom Capital's draw process is built for speed. You submit your scope of work at closing. As each phase is completed, you send photos or videos of the work, and draw funds can be wired the same day. No receipts, no on-site inspections. Keep the scope of work detailed, because it is what each draw is measured against.
Acquisition + rehab FAQ
Can hard money finance both acquisition and renovation?
Yes. Wisdom Capital finances up to 90% of the purchase price and up to 100% of hard costs, capped at 70% of ARV, with renovation funds released in same-day draws as the work is completed.
Is the loan based on the purchase price or the after-repair value?
Both. Wisdom Capital lends up to 90% of the purchase price plus up to 100% of hard costs, and the total loan cannot exceed 70% of after-repair value. Whichever limit is lower sets the loan.
Do I pay interest on the renovation money before I receive it?
Many lenders charge interest only on funds disbursed, so interest grows as draws are released. Confirm how interest is calculated on your term sheet.
Next step
Have a Deal in Mind?
Submit the property details and let’s review the financing structure.
Helpful to include
- Property address and property type
- Purchase price and target closing date
- Renovation budget or scope of work
- Estimated after-repair value (ARV) and comps
- Your recent project experience, if any