The Quick Read: No, there is no separate cap on a flip loan because the borrower lives in another state; the limits come from the lender’s sizing grid, which ties leverage to project cost, after-repair value, and the borrower’s documented experience. An out-of-state investor faces the same grid as a local one, plus a little more scrutiny on remote rehabs.
- Leverage is tiered by completed projects: 85% of project cost with fewer than 2, 90% at 2+, and 93% at 5+. Every tier is capped at 75% of after-repair value.
- Loan amounts run up to $5,000,000, larger by exception.
- Bridge purchases without rehab go up to 80% of purchase price. Refinances go up to 65% of value.
- Rehab money funds in draws against completed work, not up front.
- All figures vary by lender, property, and experience, and nothing here is a commitment to lend.
Hard money flip files are a small part of what the brokerage handles, but the same questions come up every time an investor files from out of state. The short version: your address is not the variable. Your track record, your budget, and the property’s projected value are.
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.
What Does “Cap” Actually Mean on a Flip Loan?
Three different limits get called a cap. Investors mix them up, and that’s where most bad assumptions start.
| Type of cap | What sets it | What moves it |
|---|---|---|
| Dollar maximum | Lender’s program ceiling | Experience, exception approval |
| Leverage ceiling | Cost and value formulas | Completed projects, deal shape |
| Number of loans | Lender capacity, concentration | Track record, relationship |
The dollar maximum on this program goes up to $5,000,000, larger by exception. That’s a ceiling, not a typical flip. Most flips never come near it.
The leverage ceiling is the one that bites. It is the percentage of cost or value the lender will fund. It is where a deal either fits or doesn’t.
The loan-count cap is the quiet one. Lenders rarely publish a hard limit on how many flips you can finance. In practice, capacity and concentration limits show up as experience tiers and lender relationships rather than a printed number.
How Does the Leverage Ceiling Work?
The ceiling is a lesser-of test. The loan is limited by a share of project cost and, separately, by a share of after-repair value (ARV). Whichever produces the smaller loan wins.
Quick definitions. Loan-to-cost is the loan as a share of purchase price plus rehab budget. ARV is what the finished property is projected to be worth, set by a third-party appraisal. ATTOM’s flipping analysis notes that after-repair values in flip loan data come from appraisals at origination.
On this program, flip leverage is 85%, 90%, or 93% of project cost depending on experience, always capped at 75% of ARV. Market surveys report similar-looking cost and ARV limits, but the network figures are the ones above.
Picture two deals, with round, illustrative numbers only. In the first, the investor buys cheap and spends heavily on rehab, so project cost is low relative to the finished value. The cost limit binds first, and the investor brings the gap in cash. In the second, the investor pays near market and the rehab is light. Project cost sits close to ARV, so the 75% of ARV limit binds, even at the top experience tier. A “93% of cost” headline doesn’t help there.
That’s the diagnostic. Thin spread between all-in cost and ARV means the value cap controls. Wide spread means the cost tier controls.
Is There Really 100% Financing?
No. There is no true 100% purchase program. The closest thing is that up to 100% of the rehab budget funds in draws against completed work. That is a rehab-budget figure, not a purchase LTV.
The top cost tier is reserved for experienced investors, and the 75% of ARV ceiling still applies. Anyone selling “100%” is describing a draw structure, not a loan that covers everything.
How Do Experience Tiers Change the Ceiling?
Experience is the main lever on a flip loan. It changes leverage, and it is the real driver behind most “caps” investors run into.
| Completed projects | Leverage (of project cost) | Value ceiling |
|---|---|---|
| Fewer than 2 | 85% | 75% of ARV |
| 2 or more | 90% | 75% of ARV |
| 5 or more | 93% | 75% of ARV |
First-time investors qualify at the lower tiers. Treat that as anecdotal, not a rule.
Credit matters too. A 620 minimum score applies, with additional conditions below 660. Underwriting stays asset-based, meaning property, plan, and exit, but the file still gets reviewed on the borrower side.
Documentation is where first-timers get stuck. Typical files carry entity documents, a scope of work and budget, proof of experience if claimed, and bank statements for reserves. A completed-project claim with no settlement statements behind it won’t move you up a tier.
Is There a Limit on How Many Flips You Can Finance?
Usually not as a printed number. Lenders tend not to publish a loan-count ceiling. What exists instead is practical: how much exposure a lender will take to one borrower, how your record supports larger loans, and whether your liquidity holds up across several open projects.
Investors running three or four flips at once should expect the lender to look at total exposure and reserves, not just each deal alone. The fix is a clean schedule of open projects, exit plans, and cash on hand.
Does Investing Out of State Change the Cap?
Not the cap. It changes the scrutiny.
Business-purpose lending sits largely outside consumer-credit rules. The CFPB’s Regulation Z §1026.3 exempts credit extended primarily for a business purpose, and the eCFR text also exempts credit to someone other than a natural person. Neither contains a residency test. A flip loan to an out-of-state investor is a business-purpose loan like any other.
The practical differences show up elsewhere:
- First-timer, big remote rehab. This is the one combination that draws extra review. A lender sees a distant borrower, no completed projects, and a large scope. The risk is execution, not residency.
- Property location. Geographic limits apply to where the property sits, not where you live. The program runs across 41 markets, including Washington, D.C., but is not available in LA, MN, ND, SD, or in Baltimore, Chicago, or Detroit. Confirm the property’s market first.
- Draws and inspections. Rehab funds release against completed work. A remote investor needs a contractor who documents progress and a plan for who confirms it on site.
- Entity structure. Loans to an LLC are common, subject to lender program eligibility. A consumer-purpose loan to an individual stays covered even with an LLC guarantor, per the ABA Banking Journal. This program is business-purpose only, on non-owner-occupied 1-4 unit residential, with ground-up construction to 10 units.
Licensing for private lenders varies by state and lender, so check the lender’s standing where the property sits.
For deeper vetting, see Lendmire’s piece How an Out-of-State Investor Vets Hard Money for a DSCR Exit.
What Does the Cap Not Cover?
Cash to close. Leverage is a share of cost, so the remainder is yours, plus closing costs and reserves that typically don’t roll into the loan. Budget the gap before you make an offer, not after the term sheet.
Terms run 6 to 18 months, interest-only, with no prepayment penalty. There are no multi-year options on the current program. If you need longer runway, the answer is a refinance, not a longer bridge.
What If the Numbers Don’t Fit?
Three common failure points, and what usually fixes each.
1. Low appraisal. If ARV comes in under projection, the 75% ceiling shrinks the loan. Options: renegotiate the purchase price, cut scope, or bring more cash.
2. Budget growth. A larger rehab budget raises project cost but not ARV. If the value cap already binds, the extra spend is all yours.
3. Thin spread. Little gap between cost and ARV means the deal fits a lower-leverage structure only. Pass, or restructure the price.
Remote investors should run the lesser-of math on conservative ARV before committing, not on the seller’s pitch.
How Does the Cap Affect Your Exit?
The cap sizes the bridge, and the bridge only has to cover the hold. Two exits dominate: sell, or refinance and keep the property as a rental.
Many investors refinance out of hard money into long-term DSCR financing once the property is stabilized, and Lendmire brokers that path. A flip loan cap does not carry over. A DSCR refinance is underwritten on the property’s rent against its full payment, a separate product with its own leverage rules. Lendmire’s complete DSCR loans guide covers how those programs work.
Key Terms Defined
Loan-to-cost: The loan as a share of purchase price plus rehab budget.
After-repair value (ARV): The projected value of the property after renovation, set by appraisal.
Lesser-of rule: The loan is the smaller of the cost-based and value-based limits.
Draw: A release of rehab funds after a milestone of work is completed.
Experience tier: The leverage level assigned by documented completed projects.
Frequently Asked Questions
Do lenders charge out-of-state investors lower leverage?
Not as a rule. Leverage follows experience tier, not residency. An out-of-state first-timer lands in the same tier as a local first-timer, with extra scrutiny if the rehab is large.
Can I use an LLC to borrow?
Yes, commonly, subject to lender program eligibility. Business-purpose loans to entities are standard, and the file will carry entity documents. Guarantor and structure details vary by lender and property.
What credit score do I need?
A 620 minimum applies, with additional conditions below 660. Approval still turns on the property, the plan, and the exit, and it varies by lender, property, and experience.
Is the maximum loan size really $5,000,000?
That is the ceiling on this program, larger by exception. Most flips fall well below it, because the leverage tiers and the 75% of ARV limit set the real number first. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
Does the loan-to-cost tier apply to the whole rehab?
Up to 100% of the rehab budget funds in draws against completed work. That is separate from purchase leverage, and it releases only as milestones are finished.
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. Reach the team at 828-256-2183, or request a quote through Lendmire’s quote page.
For current guidelines and terms, see Lendmire’s DSCR loan programs page.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage focused on DSCR investor financing, helping arrange programs through wholesale and investor-lending channels in 41 markets, including Washington, D.C. DSCR loans are evaluated by the lender on property cash flow rather than personal income, subject to lender guidelines, supporting LLC closings and accommodating investors with four or more financed properties. Scotsman Guide Top Mortgage Workplace in both 2025 and 2026.
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References
4. ABA Banking Journal compliance Q&A
This article is part of Lendmire’s hard money loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How a Lender Reads a Seller-Carried Note on a Hard Money Loan · Hard Money Loan Requirements to Buy Out a Land Contract · Can an Out-of-State Buyer Close a DSCR Loan If Projections Fall?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.