Why experienced Arizona operators are moving to $700K+ deals

We're 11 weeks into 2026. We've already funded $5.8M across 8 deals.

For context: we funded $10.8M in all of 2025.

But here's what's more interesting than the volume. Our average loan size jumped from $470K in 2025 to $725K this quarter.

That's not random. There's a clear pattern in who is moving upmarket and why.

The Shift: From Sub-$500K to $700K+ Deals

A year ago, most of our deals looked like this:

• Purchase: $250K-$350K

• Rehab: $40K-$80K

• ARV: $450K-$550K

• Loan amount: $300K-$400K

We still have operators crushing it at this price point. But this quarter, we're seeing more deals that look like this:

• Purchase: $450K-$600K

• Rehab: $60K-$120K

• ARV: $700K-$900K

• Loan amount: $600K-$800K

Same operators. Bigger properties. Here's why.

Reason 1: Margins Are Tighter on Cheaper Deals

In 2021-2022, you could buy a $250K property, put $50K into it, and sell for $450K. All-in cost: $300K. Profit: $150K. Even with holding costs, you cleared $100K+.

Today that same deal looks different.

After closing costs, commissions, and taxes, many operators are netting $20K-$30K. That's a major drop in profit for the same amount of work.

Meanwhile, the $700K+ deal:

• Purchase: $550K

• Rehab: $100K

• Holding costs: $40K

• All-in: $690K

• ARV: $875K

• Profit: $185K

After costs you're netting $120K-$140K. And if the deal doesn't go as planned, you're making $80K instead of $120K, not potentially in the red.

Reason 2: Days on Market Are Longer, So Your Buffer Matters

Properties aren't selling in 30 days anymore. Phoenix metro average is now 66-74 days on market, up from the mid-50s last year. Some are sitting 90-120+ days.

Here's what that does to your holding costs:

$450K property sitting 90 days:

• Interest: ~$5,400

• Taxes and insurance: ~$1,200

• Utilities: ~$600

• Total: ~$7,200

$800K property sitting 90 days:

• Interest: ~$9,600

• Taxes and insurance: ~$2,400

• Utilities: ~$900

• Total: ~$12,900

Yes, holding costs are higher on the bigger deal. But the bigger deal has more profit buffer ($185K vs $105K).

If both properties sit an extra 60 days beyond your plan, the $450K deal just lost 50% of its profit margin. The $800K deal? Still profitable with room to spare.

Who Is Actually Making This Shift

Not everyone can move upmarket. The borrowers we're funding at $700K+ all have these things in common:

• Experience. Several successful flips under their belt, or enough capital to cover the unexpected. They know how to manage bigger scopes without blowing budgets.

• Liquidity. They can cover holding costs if the property sits longer than planned.

• Proven contractor relationships. They're not finding a contractor after closing. They have reliable teams who can handle $100K+ scopes.

• Realistic expectations. They're planning 90-120 day exit timelines, not 60. And they're pricing to sell, not testing the market.

• Local market knowledge. They know the difference between East Valley, West Valley, and Scottsdale. They know which $700K+ neighborhoods move and which sit.

If you don't have all five, bigger deals will hurt you. If you do, that's where the profit is in today's Arizona market.

Sub-$600K vs. $700K-$900K Right Now

Sub-$600K:

• High investor competition

• Tight margins with less room for error

• 66-90+ days on market

• One mistake can mean break-even or a loss

$700K-$900K:

• Fewer operators can play at this level

• Better absolute dollar margins

• More selective buyer pool, but less price pressure

• Enough profit buffer to absorb delays and still come out ahead

The key: you need more liquidity and more experience to operate here. But if you have both, the numbers work better.

What This Means for You

If you're executing well on sub-$500K properties, don't change a thing. Keep doing what's working.

But if you're an experienced operator with strong liquidity, this might be the time to think bigger. The deals that felt safe two years ago are now margin-compressed and time-intensive. The $600K-$800K deals require more capital and more patience, but they offer better absolute profit with real room for error.

Reply with what you're working on and I'll tell you quickly if it fits our box.

P.S. Not sure if you're ready to move upmarket? Here's a simple test: Can you cover 4-6 months of holding costs ($30K-$50K) without touching your rehab budget? If yes, you're probably ready. If no, stay in your current price range and build liquidity first.