The Quick Read: Usually yes, because hard money lenders underwrite the property, the budget and the exit plan more than the borrower’s résumé, but a first-timer should expect the lowest leverage tier, more cash into the deal, a 620 minimum credit score, and closer review of the scope of work and resale plan than a repeat flipper gets. Experience changes the terms more often than it changes eligibility.
- Across Lendmire’s wholesale network, fix-and-flip leverage for borrowers with fewer than two completed projects is typically 85% of project cost, capped at 75% of after-repair value.
- Rehab money typically funds in draws against completed work, so plan to carry early contractor costs.
- A 620 minimum score is typical, with added conditions below 660. Everything varies by lender, property, and experience.
- There is no true 100% purchase program. Up to 100% of the rehab budget can fund in draws, which is a different thing.
- Margins on flips have thinned, so a first-timer has less room for mistakes.
Why Lenders Say Yes Without a Track Record
Hard money is asset-based. The lender is lending against a property it can resell, so the deal carries more weight than the borrower’s history. A cheap purchase, a believable budget and a clear exit protect the lender no matter who the borrower is.
What this loan actually costs to carry.
Hard money is sized against the project and priced by time. Enter the deal and see how much the program will lend, the cash required at closing, the carry while you hold it, and what is left at the exit.
Leverage tiers on the current program: 85% with fewer than 2, 90% with 2 or more, 93% with 5 or more completed projects — every tier capped at 75% of after-repair value. Loan amounts up to $5,000,000, larger by exception; terms of 6 to 18 months, interest-only, no prepayment penalty. The rehab portion funds in draws against completed work, not at closing.
Program parameters shown update from Lendmire’s centralized guideline source. Rate, points, and months are editable assumptions, not quoted terms.
Cost cap sets the loan · positive spread
Illustrative estimate only — not a quote, Loan Estimate, approval, or commitment to lend. Rate, points, and months are editable assumptions. Hard money is business-purpose financing for real estate investors, not a consumer mortgage. Leverage on the current program tops out at 93% of project cost for investors with a documented track record, capped at 75% of after-repair value, with rehab funding up to 100% of the documented budget released in draws; actual terms vary by lender, borrower experience, property, and exit. Lendmire is a mortgage broker, not a lender.
That is why many private lenders will look at a first flip. It is also why the old advice that you need a long record is only partly right. Some institutional or high-volume lenders do set a minimum number of completed projects. Smaller private lenders tend to underwrite the deal itself. The practical move is to ask each lender directly whether a first flip is eligible before you spend time on an application.
The network Lendmire works with shows how this plays out. Leverage is tiered by documented completed projects, and the first tier is open to people with none. Experience buys you more leverage. It does not decide whether you get a look.
What Changes for a First-Timer?
A first-timer typically gets the lowest leverage tier and puts in more cash. The property, loan type and collateral rules stay the same. What moves is the share of project cost the lender will fund.
Here are the leverage tiers on fix-and-flip files placed through select lenders in Lendmire’s network. Every figure varies by lender, property, and experience, and nothing here is a commitment to lend.
| Completed projects | Fix-and-flip leverage | Hard ceiling |
|---|---|---|
| Fewer than 2 | 85% of project cost | 75% of ARV |
| 2 or more | 90% of project cost | 75% of ARV |
| 5 or more | 93% of project cost | 75% of ARV |
Other structures sit beside this table. A bridge purchase with no rehab can go up to 80% of purchase price. A cash-out or rate-and-term refinance goes up to 65% of value. Rehab money funds up to 100% of the rehab budget in draws against completed work. That last figure is a rehab-budget number, not a purchase loan-to-value.
Loan amounts run up to $5,000,000, and larger loans are possible by exception. Terms run 6 to 18 months, interest-only, with no prepayment penalty. Collateral is non-owner-occupied residential property with 1 to 4 units. Ground-up construction can go to 10 units.
The Real Cash You Need
Expect to cover the gap between the loan and total project cost, plus closing costs and reserves. Cash is where beginners most often get stuck. A strong deal does not help if the investor cannot close or cannot fund the early rehab costs.
Here is a modeled example. These are assumptions, not market data. Say total project cost, meaning purchase plus rehab, equals 80% of ARV. At 85% of project cost, the loan equals 68% of ARV, which is under the 75% cap. The investor funds the other 15% of project cost, plus closing costs and reserves.
Now say total project cost equals 90% of ARV. Eighty-five percent of that cost would be 76.5% of ARV, which is over the cap. The cap governs, so the loan stops at 75% of ARV and the investor’s cash goes up. A tight deal costs the first-timer more out of pocket, not just more risk.
Draws add another cash demand. Funds are typically released against completed work. A contractor who wants money up front means the investor carries that cost until the reimbursement arrives. Reserves matter for the same reason. A budget that assumes every dollar flows on schedule breaks on the first surprise.
The Market Is Tighter Than It Looks
First flips happen in a market where profit per flip has been shrinking. ATTOM’s quarterly home flipping report puts the typical profit margin at 21.5%, with a typical gross profit of $60,526 and 77,991 homes flipped, or 6.2% of all sales.
Gross profit is not what lands in your account. WRE News notes that gross figures leave out rehab, financing, taxes, insurance and transaction costs, which experienced flippers estimate at 20% to 33% of ARV. Tax treatment varies; consult a qualified professional about how those costs apply to you.
Time is the other squeeze. The Title Report’s summary of the ATTOM data shows the typical flip took 161 days from purchase to resale. A 6 to 18 month interest-only term gives room, but every month of delay is a month of carry. A first-timer paying for leverage has less cushion than a veteran who bought cheaper and knows the contractor.
What Counts as Experience When You Have None?
Lenders weigh more than completed flips. Relevant background can help the file, and it should be presented as it actually is. Overstating it costs more than it gains.
- Contractor or trade experience. Managing a crew, working in the building trades or holding a license counts.
- A primary-residence renovation. Managing a real project from scope to finish shows you can run a budget.
- An experienced partner. A partner with completed projects can strengthen the team, and a first-timer can build a record by doing the early deals alongside one.
- A vetted general contractor. Bids, references and a written scope show the budget is real.
- Proof of funds. Cash on hand for the down payment, closing costs and reserves answers the lender’s first question.
If you have none of these, a smaller, simpler first project with a clean scope is the better test. Cosmetic work on a property bought well gives the lender less to worry about than a gut rehab.
Build the Application Package
A complete package gives the lender fewer gaps to chase. The usual items are:
1. The purchase contract or the property address.
2. A written scope of work with contractor bids behind it.
3. Your estimate of ARV, with the comparable sales that support it.
4. Proof of funds for the down payment, closing costs and reserves.
5. Entity documents, if the property will sit in an LLC or similar entity. Entity eligibility varies by lender program requirements.
6. A one-page deal summary covering purchase price, rehab budget, ARV, timeline and exit.
7. A written exit plan, either resale or refinance.
The lender sets ARV through an appraisal or a broker price opinion and an inspection, and that figure caps its exposure. Use conservative comps in your own numbers. If your ARV sits well above what the lender comes back with, the leverage tier gets recalculated against the lower value.
Credit is usually checked, though it is weighted differently than at a bank. A 620 minimum score is typical in the network, with added conditions below 660. A lower score tends to mean less leverage or tighter terms. Underwriting stays asset-based, so the property, the plan and the exit still carry the file.
Why First-Timers Get Declined, and the Fix
Most declines trace to a small set of problems, and each has a direct remedy.
| Common decline reason | What to fix |
|---|---|
| Not enough cash to close | Lower the purchase price or add a partner |
| Thin reserves after closing | Hold back liquidity beyond the down payment |
| ARV looks inflated | Rebuild the comps conservatively |
| Rehab budget unrealistic | Get written contractor bids |
| Unclear exit | Write a resale or refinance plan |
| Score below the lender’s minimum | Improve the score before applying |
Here is the common pattern. A borrower finds a deal that looks strong, then discovers the cash needed at closing is higher than expected. The fix is to run the cash-to-close math before the contract is signed, not after.
Rehab overruns are the next failure point. Budgets slip when the scope is vague, when hidden conditions show up after demolition, or when a contractor prices the job low to win it. Draws release against completed work, so an overrun is paid from the investor’s own cash until the next draw. Build a contingency into the budget, get written bids with line items, and keep reserves beyond the down payment.
From Application to Payoff
The sequence is the same for most files, and each step has a first-timer trap.
1. Application and proof of funds. The lender reviews the contract, the scope and your cash.
2. Valuation. An appraisal or broker price opinion sets ARV, and an inspection confirms condition.
3. Underwriting. The lender reviews credit, the entity, the budget and the exit.
4. Closing. You bring the down payment and closing costs.
5. Rehab draws. Funds release against completed work. Fund early costs yourself and expect reimbursement after.
6. Exit. You sell the property or refinance it. There is no prepayment penalty on the network’s current structure, so paying off early does not trigger a fee.
Beginners who come up short on cash cannot count on gap money from the lender, because the leverage tiers above already set the most the loan will fund. The practical ways to close a cash shortfall are a lower purchase price, a smaller rehab scope, an experienced partner, or private or family money, each covered in the next section.
When It Is Harder Than Yes
The answer gets harder in four situations. Large rehabs, weak credit, high loan balances and lenders with minimum-project rules each narrow the options.
A lender that screens by completed projects will decline a first flip outright, regardless of the deal. Weak credit narrows the choices and can lower leverage. A gut rehab with structural work raises the budget risk. And any score under 660 brings added conditions.
If you hit a wall, there are three ways forward. A partner with completed projects can carry the track-record requirement. Private or family money can fund the first deal, though those investors usually want to see your plan too. A smaller project can build a record that opens the higher leverage tiers.
Some experienced investors advise against hard money on a first flip because of the cost and stress. That view is reasonable if the deal has little margin. If the numbers only work at maximum leverage, the deal is probably too thin for a first project.
Red Flags to Watch For
Hard money is a legitimate tool, but scams exist around it. Be wary of:
- Upfront fees before any valuation or underwriting.
- Promises of 100% financing on a purchase. There is no true 100% purchase program.
- Claims that no credit review will happen. Underwriting stays asset-based, but credit is still reviewed.
- Pressure to sign before you see written terms.
Ask for the full terms in writing. Compare the leverage, the term and the draw process across more than one lender.
Key Terms Defined
Hard money loan: A short-term, interest-only loan secured by the property, underwritten mainly on the property and the plan.
ARV (after-repair value): The estimated value of the property once the rehab is finished.
Loan-to-cost: The share of total project cost, meaning purchase plus rehab, that the lender funds.
Draw: A release of rehab funds after a stage of work is completed.
Reserves: Cash you keep available after closing to cover costs the loan does not.
Exit strategy: Your plan to repay the loan, either by selling the property or refinancing it.
What Happens After the Flip?
Many investors refinance out of hard money instead of selling. Once the property is stabilized and rented, they move into long-term financing. Lendmire brokers that path through DSCR loans, which qualify primarily on property-level rental income covering the payment, subject to lender guidelines. The complete DSCR loans guide walks through how that refinance works.
Because the hard money term is limited and there are no multi-year options on the current program, the refinance plan should be written before the first draw is funded.
Frequently Asked Questions
Do I need an LLC to get hard money on a first flip?
Many lenders want the loan held in a business entity, and some ask for more cash up front if it is not. Entity eligibility is subject to lender program requirements. Forming the entity before you apply keeps the documents ready.
Can I get 100% financing on my first deal?
No. There is no true 100% purchase program. On a first flip, the typical tier is 85% of project cost, capped at 75% of ARV. Up to 100% of the rehab budget can fund in draws against completed work, but that covers rehab only. All terms vary by lender, property, and experience.
What credit score do I need?
A 620 minimum is typical in Lendmire’s network, with added conditions below 660. A higher score generally helps with leverage and terms. Credit is weighed less than at a bank, but it is not ignored.
What if I am denied?
Find the specific reason first. A cash shortfall, a thin reserve, an inflated ARV or a weak budget can each be corrected. Then reapply with a smaller project, a partner or a stronger package.
Does a first-timer get the same terms as an experienced flipper?
Generally not. Leverage is tiered by completed projects, and the top tier is reserved for experienced investors. The collateral and loan structure rules stay the same.
Next Step
If you are buying, rehabbing or refinancing an investment property on a short timeline and want to see how the numbers work, Lendmire can help you compare hard money options based on the project, the exit plan, leverage, and your goals. The brokerage arranges these loans through select lenders in its network across 41 markets, including Washington, D.C. Reach the team at 828-256-2183 or request a quote through the Lendmire quote page.
For current guidelines and terms, see Lendmire’s hard money loan programs page.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage built around DSCR investor lending, with programs available in 41 markets, including Washington, D.C. DSCR lenders commonly evaluate rental-income coverage instead of personal income paperwork, a practical fit for LLC-owned and multi-property investors. Terms vary by lender, property, leverage, and program. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. ATTOM: Home Flipping Profits Continue Gradual Two-Year Decline
2. WRE News: Home Flipping Returns and ATTOM Profit Margin
3. thetitlereport.com: Attom Report Showing Continuous Drop in Home Flipp
This article is part of Lendmire’s hard money loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Does a First-Time Investor Need a Down Payment for Hard Money? · Hard Money vs Private Money for a First Flip With No Experience · How Much a Servicing Transfer Changes Hard Money for a First Flip
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.