The Quick Read: Usually yes, because most hard money lenders size the loan to the deal, and a missing track record changes the leverage and scrutiny rather than shutting the door. Some lenders still require prior projects, so the answer depends on which lender reviews your file.
- First-time borrowers typically sit in the 85% loan-to-cost tier, capped at 75% of after-repair value.
- Credit generally needs to reach 620 at minimum, with added conditions below 660.
- Rehab money funds in draws after inspected work, so you carry costs in between.
- Experienced tiers (2+ and 5+ completed projects) reach 90% and 93% of project cost.
- Many flippers refinance a keeper into long-term rental financing instead of selling.
Every figure here varies by lender, property, and experience, and nothing is a commitment to lend.
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.
Why Lenders Fund a First Flip at All
A hard money loan is short-term financing from a private or non-bank lender, secured by the property itself. Corporate Finance Institute describes the structure the same way: the property is the collateral, the term is short, and the cost runs higher than a bank loan.
That collateral focus is why a first-timer has a shot. A big bank asks who you are: your income, your traditional documentation, your history. A hard money lender asks what the property is, what it will be worth after the work, and how you plan to get out. Underwriting stays asset-based.
Experience still matters. For most lenders it matters for pricing and leverage, not for the yes or no. Across the wholesale network of lenders Lendmire works with, most will review a first deal. A handful of institutional programs won’t, and that gap is why lender selection matters as much as the deal.
What Does a Lender Look At When You Have No Track Record?
Lenders weigh the project, then the person. In rough order:
- The deal. Purchase price, rehab budget, and after-repair value (ARV, the estimated worth once renovations are done).
- Your cash. Down payment, closing costs, and enough liquidity to carry the project.
- Credit. A 620 score is the typical floor, with extra conditions below 660.
- The scope and budget. Realistic line items beat round numbers.
- The exit. Sell, or refinance into longer-term financing.
- Your team. A contractor with a record, or a partner with completed flips, strengthens the file.
Income is rarely the focus. Credit still applies, though, and anyone promising “no credit check” deserves suspicion.
What Changes Without Experience, and What Doesn’t
| Factor | With no completed projects | With 2+ or 5+ projects |
|---|---|---|
| Leverage (flip) | 85% of project cost | 90% or 93% of project cost |
| ARV cap | 75% of ARV | 75% of ARV |
| Lender scrutiny | Closer on reserves and exit | Lighter |
| Eligibility | Still reviewed | Still reviewed |
The ARV cap does not move. Leverage on a flip is a loan-to-cost figure (the loan as a share of purchase plus rehab), and the lender applies whichever test, cost or ARV, produces the smaller loan. These are typical network ranges that vary by lender, property, and experience.
Also note what is not on the menu. There is no true 100% purchase program. Up to 100% of the rehab budget can fund in draws against completed work, but that is a rehab figure, not a purchase loan-to-value. Pitches promising no money down to a beginner, especially ones that ask for upfront fees, belong in the red-flag pile.
What Counts as Experience When You Have None?
Lenders count more than prior flips. Relevant background includes buying and renovating your own home, managing contractors, project management or construction-adjacent work, and sales experience. A partner or contractor with completed projects helps too.
This is where a co-investor earns their share. An experienced partner can sanity-check the scope of work and, with some lenders, improve how the file is viewed. The tradeoff is splitting profit. For a first deal, many investors consider that cheap tuition.
The Cash Gap Nobody Mentions
Here is the part that stalls first-timers. Even at 85% of project cost, you still bring the remaining 15%, plus closing costs. Then the draw schedule adds a second cash need.
Rehab funds are released after inspected work, not at closing. You typically pay the contractor, request an inspection, and get reimbursed. Between draws, your cash carries the job. A buyer with a strong contractor bid and thin liquidity can still get stuck mid-project.
Before you apply, count three buckets: money at closing, money to carry the work between draws, and a contingency cushion.
A First Flip, Step by Step
Run the numbers on a modeled first flip, with every input an assumption rather than market data. The example uses percentages instead of dollar amounts: set the purchase price at 100 and express everything else against it. Assume rehab runs 20% of the purchase price and ARV comes in at 175% of the purchase price. The lender sizes at the 85% first-timer tier.
1. Pre-qualification. You share the property, price, rehab scope, ARV, and credit. Zero completed projects is an accepted answer.
2. Entity. Many lenders lend only to a business entity, so you may form an LLC before closing. Entity use is subject to lender program eligibility.
3. Deal package. Purchase contract, scope of work, budget, comparable sales supporting ARV, ID, and entity documents.
4. Valuation and the two tests. Project cost is 120 (purchase 100 plus rehab 20). Loan-to-cost at 85% gives 102. The ARV cap at 75% of 175 gives about 131. The cost test produces the smaller loan, so it controls. As a sanity check, the common 70% rule of thumb for ARV, which MasterClass explains, puts the ceiling on cost at about 122.5, so 120 just clears it.
5. Closing. Your equity share is the other 15% of cost, equal to 18 on this scale, plus closing costs. That is 18% of the purchase price before any carry.
6. Draws. The 20 of rehab is paid out against inspected work. You front each phase and wait for reimbursement, so liquidity beyond the 18 matters.
7. Exit. Sell near 175, or refinance a keeper.
Now stress it. Suppose the rehab runs 10% over budget, which is 2 on this scale. That overrun sits outside the loan sizing and comes from your pocket. If ARV lands at 160 instead of 175, the 75% cap falls to 120, still above the 102 loan, but your margin over total cost shrinks from 55 to 40 before carry and selling costs. Interest-only carry keeps accruing while the sale drags.
Terms run 6 to 18 months, interest-only, with no prepayment penalty. There are no multi-year options on the current program. That clock is the real risk on a first project.
What Lenders See in a First-Timer File That Experienced Files Skip
In files placed across the network, lenders compensate for missing history in predictable ways. They look harder at reserves, at whether the scope matches the budget, and at whether the exit is believable. A first flip with a vague plan and a vague contractor reads as risk. The same deal with a detailed scope, a vetted bid, and a defined exit usually reads as manageable.
The strongest first-timer files share one habit: the borrower shows up with a package, not a pitch. Comps, line-item budget, timeline, and exit written down before the first call.
Should You Do It at All?
Not every beginner needs hard money. It is short-term capital with higher cost and draw friction, and a thin-margin flip can lose money fast once carry and overruns hit. If your cash is very light, a smaller cosmetic project or a partnership may be the smarter first step.
How you hold and sell also shapes taxes. Federal law defines a capital asset to exclude property held primarily for sale to customers, which is why flips are treated differently from long-term holds. Tax treatment varies; consult a qualified professional before relying on any deduction.
It’s a genuine toss-up for many beginners. Hard money can scale a business, but a first deal rewards the investor who has modeled the downside.
When the Flip Becomes a Rental
Plenty of investors decide mid-project that the house is worth keeping. Many refinance out of hard money into long-term DSCR investor loans once the property is stabilized, and Lendmire brokers that path. DSCR is the debt service coverage ratio: monthly rent compared with the full monthly obligation (principal, interest, taxes, insurance, and any HOA dues).
On a purchase, most DSCR files land at 75% to 80% LTV, and select programs start at a 1.00 coverage floor. A separate select-lender path goes below 1.00, with leverage and terms adjusted. Clearing 1.00 is not the same as positive cash flow, since repairs, vacancy, and management sit outside the calculation. Qualification runs primarily on property-level rental income covering the payment, subject to lender guidelines. The complete DSCR loans guide walks through the details.
Key Terms Defined
- Hard money loan: short-term, asset-based financing from a private or non-bank lender, secured by the property.
- ARV (after-repair value): the estimated value after renovations are finished.
- Loan-to-cost: the loan as a percentage of purchase price plus rehab budget.
- Draw: a rehab payment released after inspected work.
- Exit strategy: how the loan gets repaid, by sale or refinance.
- DSCR: monthly rent divided by the full monthly housing obligation.
Frequently Asked Questions
Do I need an LLC before I apply?
Not always. Many lenders lend only to a business entity, but you can often name the intended entity at application and form it before closing. Whether an LLC is accepted depends on program terms, so confirm with the lender early.
Can I get 100% financing on my first flip?
No. There is no true 100% purchase program. Up to 100% of the rehab budget can fund in draws against completed work, but you still bring equity on the purchase, and first-timers typically sit at the lower leverage tier.
What credit score do I need?
A 620 score is the typical minimum, with additional conditions below 660. First-time investors qualify at the lower leverage tiers. Underwriting stays asset-based, but credit is still reviewed, and requirements vary by lender.
How many flips before my terms improve?
Leverage steps up in tiers: fewer than 2 completed projects sits at the first-timer tier, 2 or more reaches 90% of project cost, and 5 or more reaches 93%. Documented completed projects are what move you.
Do I need a contractor lined up first?
You need a credible scope of work and budget before final terms, and a vetted contractor bid makes that package believable. A rough plan may be enough to start a conversation, but the lender will want specifics before funding.
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.
About Lendmire
Lendmire (NMLS# 2371349) is a DSCR-focused mortgage broker that helps arrange investor financing across 41 markets, including Washington, D.C., through wholesale and investor-lending channels. DSCR eligibility is generally reviewed by the lender around the property’s rental income rather than personal income documentation, subject to lender guidelines, which works for self-employed investors, LLC operators, and portfolios above four financed properties. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Corporate Finance Institute: Hard Money Loan
2. MasterClass
3. Cornell LII: 26 U.S. Code 1221
This article is part of Lendmire’s hard money loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: First-Time DSCR Refinance Requirements After a Hard Money Rehab · Can an Investor Get a Hard Money Loan Without Verifying Income? · Is a Bridge Loan Different From Hard Money for Investors?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.