Tariff swings on steel, aluminum, and finish goods can nuke a rehab budget mid-project. For fix-and-flip operators, the winners aren’t the ones who guess prices perfectly—they’re the ones who lock, hedge, and sequence the project so surprises don’t crater margin or timelines. Here’s a field-tested playbook—and how we structure funding at LoanFunders.com to back it up.

• Price volatility is a scope problem, not just a cost problem. Design scopes that tolerate swaps.

• Lock what matters, float what doesn’t. Use written price-hold windows and substitution trees.

• Finance to the schedule, not the spreadsheet. Align draws and reserves to real lead times.

• Model sensitivities before you sign. +10–15% materials, +4–8 weeks lead time.

Where Flips Get Hit First

• Windows/doors & exterior metals: aluminum frames, railings, roofing, gutters.

• HVAC & electrical: coils, wiring, panels.

• Kitchens/baths finishes: appliances, hardware, fixtures (import exposure).

• Steel-related carpentry: fasteners, connectors, metal studs on heavier rehabs.

Pricing Moves That Actually Work

1. Dual Quotes + Hold Letters
   Get two vendor quotes for metal-heavy items with written price-hold windows (e.g., 30–60 days) and delivery dates. Attach these to your GC agreement and budget packet.

2. Substitution Tree (A/B SKUs)
   Pre-approve swap paths that keep your ARV intact:

   • Aluminum → alternative profiles or thermally-broken options

   • Tube steel handrails → wood/glass variants where code allows

   • Appliance set A → Set B with similar buyer appeal/price point
     Keep cut sheets in your file so appraisers and buyers understand quality is comparable.

3. Escalation Clause + Indexed Allowances
   Use an escalation clause for specified materials tied to public indexes (steel/aluminum). Cap the upside (e.g., “Owner pays increase above 8%”) and define proof (supplier letters).

4. Early Buys on Long-Lead Items
   Place deposits earlier to secure fabrication slots (windows/doors, custom metals) while sequencing demo/rough-in to avoid idle crews.

5. Right-Size Contingency

   • Light rehab: 7–10%

   • Heavy rehab/structural: 10–15%
     Higher if your lead times or inspections are historically slow.

Scope & Design That Preserve ARV (without cost blowups)

• Flooring: pick a LVP/LVT line with multiple in-family colors so stockouts don’t force full re-selections.

• Tile: standardize formats (e.g., 12×24) across bathrooms; keep trim choices interchangeable.

• Kitchens: cabinet lines with quick-ship doors; stone with at least two alternate slabs approved.

• Exterior: if metal costs surge, have a vinyl/fiber-cement alternative pre-approved by HOA/city.

Contract Language to Copy/Paste

• Allowances: “Cabinets $12,500; Tile $4,200; Windows/Doors $18,000—subject to substitution within approved catalog if primary SKU unavailable.”

• Escalation: “Material escalation for steel/aluminum-coded items beyond 8% vs. quote date borne by Owner, evidenced by supplier letter; decreases beyond 5% credit back to Owner.”

• Schedule: “GC to provide lead-time letters and update Gantt weekly; draw requests follow deposit/fab/delivery/install milestones.”

Budget & Timeline Math (quick cheats)

• 1% materials overrun = ~1% margin hit if ARV is fixed. Bake a +10–15% materials sensitivity in your model and confirm you still clear your target profit.

• Lead time slip: Every 2 weeks of delay at $3,000/mo carry ≈ $1,500 profit erosion—double if staging/crew remobilization is required.

Draws & Reserves That Match Reality

• Milestone-based draws: Deposit → Fabrication → Delivery → Install.

• Interest reserve (when useful): Cover carry during known gap periods (special order windows/doors) to avoid forced sales.

• Vendor-backed invoices: Attach quotes/hold letters to each draw to keep everyone aligned (you, GC, lender).

Appraisal: Keep Value Defensible

• Before photos + scope + after comps with adjustments (quality, bed/bath count, GLA).

• Cut sheets for any substitutions; emphasize equal or superior quality.

• Permit & inspection receipts to support the legitimacy of structural/MEP work (buyers and appraisers care).

Red Flags (that cost you time or LTC)

• “Hero” brand substitutions that downgrade the buyer experience to save pennies.

• One vendor with no hold letter on a six-figure window package.

• Over-reliance on temporary rate buydowns to “fix” profit—buydowns don’t lift value; they only change payments.

Funding with LoanFunders.com (built for volatility)

Fix & Flip

• Min FICO 660 (700+ recommended)

• LTC: up to 90% for 3+ flips; up to 82.5% for 1–2 flips with 700+ FICO; max 60% for 660–699 / Foreign Nationals

• Rates from 8.5% | $100K–$3M (to $4.5M case-by-case)

• Draws aligned to deposit/fab/delivery/install; interest reserves available for long-lead exposure

New-Investor (Light Rehab) Track

• 680+ FICO (700+ recommended)

• Case-by-case leverage and pricing based on scope quality, comps, and experience proxies

DSCR Take-Out (if you decide to hold)

• We’ll model payment options (standard vs. permanent buydown, I/O) and confirm what actually improves DSCR and proceeds.

Pre-Close Checklist (save this)

• Two quotes + hold letters for metal-heavy items

• Substitution tree with pre-approved SKUs/cut sheets

• Escalation clause + indexed allowances

• Contingency set (7–15%) matched to scope risk

• Gantt with lead-time letters; milestone-based draw calendar

• Appraisal packet: before photos, scope, comps, permits

Next Steps

Send us address, purchase status, scope/budget (with vendor quotes), timeline/Gantt, comps, and experience. We’ll return a soft quote with LTC, a draw & reserve map tailored to your lead times, and options to protect your margin if tariffs stay jumpy.

Start your soft quote at LoanFunders.com or reply to this email—let’s keep your flip on budget and on schedule.

Disclaimer: Program terms, guidelines, and pricing are subject to change without notice and may vary by scenario. This is not a commitment to lend. All loans subject to underwriting and applicable regulations.