Lexington has a deep supply of 1950s and 1960s brick houses that are structurally solid but badly dated, and a buyer pool that will pay for a clean, updated home close to downtown, the university or the hospitals. That gap is where most local flips make their money.
In short: LendingStreet makes fix and flip loans on 1-8 unit investment properties in Lexington and the Bluegrass region from $150,000 to $5M+. Programs go up to 90% of total cost and up to 100% of rehab on some programs, with interest-only short terms and closings in as little as 10 days. You exit by sale or by refinancing into a DSCR loan.
The most common Lexington flip is a brick ranch or a 1940s cottage in Kenwick, Gardenside, Meadowthorpe, Southland or the neighborhoods off Tates Creek Road. The bones are usually good: brick exterior, hardwood under the carpet, a basement or crawlspace. The work is in kitchens, baths, electrical, HVAC and windows. Buyers looking for an updated home inside New Circle Road often pay a premium over the suburbs because of the commute.
Older shotgun and Victorian houses on the east side and near North Limestone can produce bigger margins, but they also carry more surprises. Newer suburban homes in Hamburg or Masterson Station rarely need enough work to justify a flip.
Lexington buyers tend to reward the same upgrades over and over: an open kitchen with durable counters, a second full bath in a two-bedroom house, updated electrical and HVAC, and refinished original hardwood. Investors who stick to those items and avoid over-improving for the neighborhood usually hit their numbers.
A fix and flip loan is sized on loan-to-cost, meaning purchase price plus rehab budget. On some programs we fund up to 90% of total cost and up to 100% of the rehab budget, with rehab funds released in draws after inspections. The after-repair value from the appraisal also limits the loan, so your scope and comparable sales must support the resale price.
Payments are interest-only on the amount drawn. Experience affects leverage: an investor with several completed projects usually gets closer to the maximums than a first-time flipper.
This example is illustrative and not a quote. An investor buys a two-bedroom cottage in Kenwick for $210,000 and budgets $72,000 to open the kitchen, add a second bath, rewire, replace the HVAC and refinish the floors. Total cost is $282,000 and the ARV is $365,000.
The loan covers 85% of the purchase ($178,500) plus the full rehab, for $250,500, or about 89% of cost. The investor brings about $31,500 plus closing costs. Fully drawn, estimated interest-only payments are about $2,192 a month, or about $13,151 over a 6-month project.
| Item | Amount |
|---|---|
| Purchase plus rehab | $282,000 |
| Loan amount | $250,500 |
| Cash from investor (before closing costs) | $31,500 |
| Estimated interest, 6 months (fully drawn) | $13,151 |
| Taxes, insurance, utilities (6 months) | $2,520 |
| Selling costs at about 7% of ARV | $25,550 |
| Estimated profit before closing costs | $41,779 |
Even solid brick houses have recurring trouble spots.
Set aside a contingency of 10% to 15% of the rehab budget. In a solid brick house it often goes unused, but a failed sewer line or a joist problem in the crawlspace can eat it quickly, and having it already in the plan keeps the project moving.
Lexington and Fayette County share one government, the Lexington-Fayette Urban County Government (LFUCG), so permitting runs through a single building inspection office for the whole county. Electrical, plumbing, HVAC and structural work need permits. Some neighborhoods, including parts of the downtown area and historic districts like Bell Court and the South Hill area, are under historic preservation overlays that review exterior changes such as windows, siding and porches. Check before you price a window package.
Pull permits before your first draw request so inspections line up with the draw schedule.
Lexington's resale market follows the school year and the university calendar. Listings that hit in spring and early summer reach families who want to move before school starts, and faculty and medical hires often arrive in summer. A flip that finishes in November may sit longer. Build your timeline backward from a spring listing date when you can.
Appraisers compare your finished house with renovated homes nearby, so a flip in Kenwick is compared with updated homes in Kenwick and the surrounding streets, not with new construction in Hamburg. Pull three to five recent sales of renovated homes within a mile when you can, with square footage and condition notes. Strong comparables speed up review and support the loan amount.
If your street has few renovated sales, widen the search carefully and explain the adjustments. Appraisers appreciate a well-organized package, and it can head off a low value that would shrink your loan.
Lexington's rent-to-price ratios mean many flips also work as rentals. If you decide to hold, lease the property and refinance into a 30-year DSCR loan that qualifies on rent. That can pay off the flip loan and return part of your cash, depending on the new appraised value.
Decide early which exit you want, because rental-grade finishes and resale-grade finishes are not the same. A house meant to rent can use tougher, simpler materials; a house meant to sell to a family in Kenwick or Southland usually needs a bit more polish in the kitchen and baths.
Our investor loans are business-purpose loans on non-owner-occupied property. Send the address, price, scope of work, budget and ARV comps through the form below or call (877) 298-1001. For statewide details, see our Kentucky fix and flip page.
Up to 90% of total cost and up to 100% of rehab on some programs, limited by the after-repair value and your experience.
In as little as 10 days with a complete file, clear title and a scheduled valuation.
Yes. Flip loans are short-term and interest-only on the amount drawn.
Through draws. After each stage, an inspector confirms the work and funds are released for completed items.
They can. Exterior changes in historic districts may need review, so check with LFUCG before you set your budget.
Yes. We lend on 1-8 unit investor rehabs across the Lexington area, including nearby counties.
Yes, though leverage may be lower and a contractor with a track record helps.
Yes. Once finished and leased, you can refinance into a DSCR loan qualified on rent.
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