Fix and Flip Closing Checklist for Hard Money Loans

You got the term sheet. The numbers work. You signed it, sent it back, and then the process went quiet and you started wondering what you are supposed to be doing.

That gap is the part nobody explains. Between a signed term sheet and money wired to the title company, your file picks up a list of conditions. A condition is just a box somebody has to check before the lender will release money, and every one has a name and an owner. On a fix and flip file there are eleven. Eight have to clear before anyone funds anything, and only four of those have your name on them: the rehab budget, your entity docs, proof of funds, and the credit check. The rest belong to the lender, the title company, and an insurance agent, and they run in parallel the moment you hand off your side.

That ratio is the most useful thing to understand about closing. Most of the waiting is not waiting on you, and the part that is on you can be finished before you are even under contract. This is the checklist I walk first-time investors through. Capital Kings is a broker, not a lender, so what follows is what several different lenders will each want at closing rather than one company's list. The process is the same anywhere, but the specifics below are Texas: the filing fees, the title timeline, and the insurance rules are all ours.

What Happens Between Terms and Funding

A signed term sheet is not an approval. It is the lender saying "these are the terms we would lend on, assuming everything checks out." The checking out is underwriting, and it runs on a track that looks like this.

The clock does not start when you sign the term sheet. It starts when your last document lands. I have seen the same lender fund in six days and in five weeks, and the difference was almost never the lender.

Your Closing Readiness Check

Tap each item you already have in hand. If you are not under contract yet, this list is your head start. If you are, it is your to-do list for today.

Everything on that list collapses into six upload categories in the Capital Kings borrower portal: property contract, rehab budget, bank statements, government ID, LLC documents, and other. You get access the moment you start an application, at no cost, and it is where your term sheet, your conditions, and your documents all live so you are never reconstructing a loan out of an email thread.

Capital Kings Portal · Documents

The category worth calling out is rehab budget, because that is where the most files get sent back. A lender is not being difficult when they reject a lump sum. They are funding that rehab in draws, and a draw inspector has to be able to look at the property and say "the kitchen line was $14,000, the kitchen is done, release it." You cannot inspect against a number that just says $65,000. The mechanics of how that money comes back to you are in how construction draws and rehab holdbacks work.

How Long Each Piece Takes

"Start early" is useless advice without numbers attached, and the number you actually need is whether you can hit the closing date already written into your contract. These are Texas figures, in business days, and they overlap.

Good news most first-timers do not hear: lenders close on an insurance binder, not the fully issued policy. Get the binder in hand and closing does not wait on the policy. If someone tells you it does, ask why.

The Eleven Conditions, And Who Owns Each One

Here is the part that takes the anxiety out of the wait. When a deal feels stalled, it is almost always sitting on one specific person, and it is often not you. Filter the list by who is holding it.

You are not guessing at any of this while it happens. Here is a real fix and flip file mid-flight, trimmed to the eight items that were actually in play on that property.

Capital Kings Portal · Closing Conditions

That is the difference between a checklist and a tracker. You are never told "we are still working on it." You can see that the insurance binder was requested, that the appraisal came back Tuesday, and that the one thing anybody needs from you is two months of statements on the operating account.

Cash To Close Is Not Just Your Down Payment

This is the number that catches people. You budget for a 10% down payment, the settlement statement comes back several thousand dollars higher, and it feels like something went wrong. Nothing went wrong. Cash to close is the down payment plus the costs of putting the loan together.

The one people miss is lender fees, because they are not a percentage of anything and so they never show up in the mental math. They are flat charges for underwriting, processing, and document preparation. Our term sheets default them to $749 all in; a heavier shop can run a couple thousand. Either way they are real, they are on the settlement statement, and they are part of the gap between the down payment you budgeted for and the number title asks you to wire.

Every one of those line items shows on your term sheet before you ever get to the closing table, so the loan costs in the folder at signing should match the document you already read. Title will add its own escrow and tax proration lines, which are the seller's and the county's math rather than the lender's, so expect those to appear for the first time on the settlement statement.

Capital Kings Portal · Term Sheet

Run your own numbers below. This is the same pricing engine that generates our term sheets, so the shape of the answer is real rather than a generic mortgage calculator. It is still an estimate: the final figure moves with the appraised value and with which lender your file lands at.

Notice what the estimate does with the rehab budget. It is financed and held back, released in draws, so it usually does not show up in your cash to close and what you fund at the table is the purchase side. The exception: lenders cap the loan at a percentage of the after repair value, commonly 75%. If your ARV comes in tight, that cap binds before the down payment rule does, the loan gets sized off the ARV instead, and the part of the rehab it no longer covers lands back in your cash to close. Watch the "sized by" line under the loan amount. When it says 75% LTARV rather than a down payment percentage, the cap is driving your number. The line by line version is in cash to close on a fix and flip.

Why stronger credit can mean more cash at closing

One result surprises people, so here it is plainly: stronger credit does not always mean less cash at the table. Move the credit selector and watch the cash needed jump around instead of falling steadily. That is not a penalty and it is not a bug. Your down payment is not a grade on your credit. It is a function of which lender will take the file and how that lender structures it.

Here is the actual shelf. Below 600, one lender will take bruised credit and close fast, and they want 10% down. At 600 a second lender opens up who will go to 5% down, the least cash on the whole shelf. At 700 that 5% lane is still yours. We just default you to the 15%-down program, because parking that extra equity takes your rate from about 12% down to between 8.99% and 9.49%, and your origination from 2% to 0.5%.

Put real numbers on it. Same deal for both: $185,000 purchase, $45,000 rehab, $295,000 ARV, nine month hold, no earnest money yet. You can reproduce all of this in the calculator above. A 680 borrower on the 5% program brings $23,872 to closing and pays $17,829 in interest. A 760 borrower on the 15% program brings $39,339 and pays $12,123. So the strong-credit borrower brings about $15,500 more, but their actual fees are roughly $3,500 lower, because origination drops from 2% to 0.5%. The extra $18,500 is down payment, which is equity, and equity comes back to you when the property sells. Fees never do.

So the real question is not which is cheaper. It is whether you would rather have $15,500 in your pocket during the project or about $5,700 less interest at the end of it. If you are doing one deal, the cheaper money usually wins. If the cash is what lets you do two deals instead of one, take the 5% program and pay the rate. Both are correct, and you get to pick, which is the part a single lender cannot offer you.

If You Are Using a Purchase-Only Loan Instead

Not every deal needs a rehab holdback. If you are paying for the renovation yourself, a purchase-only hard money loan finances the purchase and stops there. The list is shorter, but the number of things that actually have to clear before funding is the same eight. What changes is which eight.

The one condition purchase-only adds is exit strategy documented and verified. Because the lender is not funding a rehab, they want to know how their money comes back: a sale, or a refinance into longer term financing. Neither answer is wrong, they just want it stated. The full tradeoff between the two products is in purchase-only versus fix and flip.

What Actually Delays Closings

I would rather tell you this in advance than apologize for it later. In rough order of how often it happens:

Almost every slow closing I have seen was a borrower side document nobody started until somebody asked for it twice.

Two more are outside your control: appraisals run long when access has to be coordinated with a seller or a tenant, and title occasionally turns up something real, an old lien or an heirship issue, that simply takes time to clear. Neither is a reason to panic, and both show up on your conditions list the moment they come up.

What Closing Day Looks Like

Nobody walks first-time investors through this part either, so here it is.

A day or two before, you get the settlement statement. Read it against your term sheet. The loan costs should line up. Title and escrow lines will be new, because those are the title company's math, not the lender's. If a number does not make sense, ask before you sign, not after.

You will wire your cash to close, not bring a check. Most title companies will not take a personal check, and many prefer a wire even over a cashier's check. Wires have cutoff times, usually early afternoon, and your bank may cap how much you can send online. Find out your limit before closing day, because discovering it at 2pm is how a closing moves to Monday.

Verify wire instructions by phone, using a number you looked up yourself. Closing wire fraud is real, it targets exactly this moment, and it works by sending you a convincing email with changed instructions. No legitimate title company will email you updated wire instructions out of the blue. If you get one, assume it is fraud and call the office directly. This money is not recoverable once it is gone.

You sign as the entity, not as yourself. Bring your ID. You will sign as a member or manager of the LLC, which is why underwriting cared so much about the operating agreement naming who has authority to do that.

Funding usually follows signing, not always the same hour. The wire goes out and the deal records. Keys typically follow recording. If you are planning to have a crew on site the next morning, confirm the timing rather than assuming.

Have your exit answer ready. Underwriting will ask how the loan gets paid off, and a hard money loan is short term by design. Two answers cover almost everyone: sell it, or keep it and refinance into longer term financing once it is leased, usually a DSCR loan. You do not need a signed plan. You need an answer you actually believe, and it is worth deciding early, because a property you plan to keep is worth renovating slightly differently than one you plan to sell.

Where To Start

If you are still shopping and want to make offers with something credible behind them, get pre-approved first and worry about the document stack after. If you already have a property under contract, start with the entity docs and the rehab budget today, because those two are the long poles. And if you want a second read on whether the deal itself works before you spend any of this effort, run it through the 70% rule, or send it over and I will shop it across the network and hand you a written comparison of what several lenders will each actually do with it.

The thing I would most want you to take away is the ratio. Four of the eleven are yours. Finish your four and the rest of this is other people working while you go find the next deal, and a quiet week stops meaning something has gone wrong.

Frequently Asked Questions