The Quick Read: A first-time flipper can usually get hard money without a track record, but the lender funds only part of the project, so the budget is really a cash stack: the equity gap, fees and closing costs, reserves, the first contractor stage, a contingency cushion, and an exit cushion. Experience changes leverage and pricing far more than it changes eligibility.
- Across Lendmire’s wholesale network, fix-and-flip leverage is tiered by completed projects: 85% of project cost with fewer than two, 90% with two or more, and 93% with five or more.
- Every tier is also capped at 75% of after-repair value (ARV), so a thin margin raises your cash need.
- Up to 100% of the rehab budget funds in draws against completed work. That is not a 100% purchase program.
- Plan on fronting the first contractor stage, and hold contingency in your own cash.
- Terms and figures vary by lender, property, and experience, and nothing here is a commitment to lend.
Can You Get Hard Money With No Track Record?
Usually, yes. Hard money lenders underwrite the deal: the property, the plan, and the exit. They do not underwrite your income the way a bank does. A first-timer is not shut out. A first-timer is placed on the lowest leverage tier.
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.
In practice, the network works like this. Leverage is measured against total project cost, which is purchase plus rehab. A second cap measures the loan against ARV. Credit still matters. The program minimum is a 620 score, with added conditions below 660, and first-time investors qualify at the lower leverage tiers. The top tier is reserved for experienced investors.
The tier you land in tells you your gap. At 85% of project cost, you cover about 15% of the project yourself, before fees and reserves. At 93%, the gap shrinks to about 7%. That is why lenders talk about experience. It sets how much of your own money sits in the deal.
The Cash Stack at a Glance
The loan is never your whole budget. Total cash is the sum of several buckets, and most beginners count only the first one.
| Budget line | What it covers | When it’s due |
|---|---|---|
| Equity gap | Project cost not funded by the loan | At closing |
| Lender fees and closing costs | Origination, title, appraisal, legal | At closing |
| Reserves | Proof you can carry the project | Verified before approval |
| First-draw float | The first contractor stage | Before the first draw |
| Contingency | Overruns and surprises | During the rehab |
| Exit cushion | Payoff costs and appraisal shortfall | At sale or refinance |
Lender guidelines set the first three lines. Your own discipline sets the last three. Lenders do not cover those, and they are where first deals go wrong.
How the Budget Itself Gets Built
Lenders fund only what is in the approved budget. A vague budget stalls the file, and a budget that is too low pushes every overrun onto you. Build it line by line, not as a rough sketch like roof, HVAC, and interior.
A file that clears review usually has these pieces:
- A scope of work with itemized costs for each trade.
- Contractor quotes that match the scope.
- Comparable sales that support both your purchase price and your ARV.
- A realistic timeline.
- Entity documents and a personal financial statement.
- Proof of your cash and reserves.
Use conservative numbers for ARV. The National Association of Realtors publishes a review of remodeling projects that offer the best value at resale, comparing estimated project cost with likely resale value. Some projects return much less than they cost. A budget should match what the market will pay for the finished house, not what the renovation costs.
Draw Timing: The Cash Trough
Draws reimburse completed work. The lender funds the purchase at closing and holds the rehab portion in escrow. After that, the cycle repeats. Your contractor works. You pay the contractor. An inspector visits, or you submit photos and invoices. The lender releases the draw.
That creates a gap. Contractors want money before they start, and lenders generally reimburse completed work rather than funding materials up front. A few lenders release a small initial draw at closing, but most do not. As a planning figure, first-timers often front something like a fifth of the rehab budget. Treat that as an estimate, not a rule. Your contractor’s payment schedule is the real number.
Draw cadence also varies. Some lenders inspect every draw. Others accept photos. Some charge a fee per draw. Get all of it in writing before you commit, because the cadence decides how much cash sits idle between requests.
A Worked Example in Percentages
Say a first-time flipper buys a house where purchase is 75% of project cost and rehab is 25%. Everything below is a modeled assumption, not market data.
- Tier: With fewer than two completed projects, the loan is 85% of project cost. The gap is 15% of project cost.
- Healthy margin: If ARV is 130% of project cost, the 75% ARV cap equals 97.5% of project cost. The 85% tier binds, and the gap stays at 15%.
- Thin margin: If ARV is only 110% of project cost, the cap equals 82.5% of project cost. The ARV cap binds, and the gap grows to 17.5%.
Now add the other buckets. Fees and closing costs come on top of the gap. Reserves must be verifiable. Contingency of 10% to 15% of the rehab budget sits in cash, outside the lender’s draw schedule. The first contractor stage must be funded before reimbursement arrives.
Stress it. Suppose rehab runs 20% over budget and the project takes extra months. The overrun is not financed, because the draw schedule funds only the approved budget. Interest keeps accruing on a balance that is not shrinking. A contingency cushion absorbs the first and softens the second. Without it, the overrun comes out of personal savings mid-project.
Margins matter here. HousingWire’s flipping report shows typical flip profit and return falling to their lowest levels since 2008. As WRE News reports on ATTOM’s flip data, the published gross profit figures do not subtract rehab, financing, taxes, insurance, or carrying costs. Headline flip profit overstates what lands in your pocket, and thin margins are exactly where the ARV cap starts to bind.
Budget the Exit, Not Just the Purchase
An exit is a payoff, and the payoff includes more than the original loan. It includes accrued interest, any extension fees, and selling or refinancing costs. Terms on this program run 6 to 18 months, interest-only, with no prepayment penalty. There are no multi-year options. Delays cost money every month.
For a sale, test the price you would accept if comps soften. If the budget only works when the buyer pays your exact target, it does not work.
For a hold, many investors refinance out of hard money into long-term DSCR financing once the property is stabilized, and Lendmire brokers that path. Cash-out refinances on standard rentals top out around 75% LTV across most of the network, and about 6 months of seasoning is a common expectation. Both vary by lender. The break-even appraisal is the hard money payoff plus exit costs, divided by 0.75. The appraisal must land at or above that number. Build in a cushion, because appraisals miss. The complete DSCR loans guide explains how rental coverage is measured. Clearing a coverage ratio is not the same as positive cash flow, since repairs, vacancy, and management sit outside it.
Where the General Rule Breaks
The mechanics above hold for most files. These edge cases change them:
- Lender-specific rehab caps. Some lenders in the wider market limit a first-timer’s rehab relative to purchase price. A heavy-rehab first deal can price out of those programs.
- Ground-up and big jumps. Ground-up construction reaches 90% of cost and 75% of completed value only at three or more completed projects. Lenders also want your first project to be a logical next step, not a leap into large construction.
- Small loans. Smaller balances vary by lender, and some lenders skip small loans. The program ceiling is $5,000,000, larger by exception.
- Borrowing less. First-timers sometimes get better terms by using less than the maximum leverage. It costs more cash, so it only works if the cash exists.
- Property type. The program covers non-owner-occupied residential of 1 to 4 units, plus ground-up to 10 units. Commercial, land, and owner-occupied properties are not offered.
Lenders also differ on documentation, draw cadence, and what they count as verifiable reserves. That is the reason to compare several rather than rely on one lender’s published terms.
If You’re Short
A shortfall is a decision point, not a failure. Your realistic options:
| Option | Upside | Trade-off |
|---|---|---|
| Smaller project | Lower total cash | Smaller profit |
| Partner or private money | Fills the gap | Shares profit, adds a relationship |
| Wait to complete more projects | Higher leverage tier later | Delays the first deal |
| Self-funding an early flip | Builds history | Ties up your capital |
A partner can fill the equity gap, but the lender still reviews the property and the plan. Do not stretch to a larger deal just because a tier looks reachable. If the numbers only pencil with every cushion removed, reduce the scope.
Key Terms Defined
Loan-to-cost: The loan as a percentage of purchase price plus rehab budget.
After-repair value (ARV): The estimated market value of the property once the work is finished.
Equity gap: The part of project cost the loan does not cover, which you pay in cash.
Draw: A release of escrowed rehab funds after completed work is verified.
Contingency: Cash set aside for overruns, held outside the lender’s draw schedule.
Reserves: Verified liquid funds showing you can carry the project through completion.
Break-even appraisal: The lowest exit appraisal that still covers your payoff and exit costs.
Frequently Asked Questions
Can I flip with no experience and no money down?
No. Hard money is not zero-down. The loan funds a percentage of project cost, and you cover the gap plus fees, reserves, and contingency. Advertised 100% refers to rehab funded in draws after the work is done.
Does lack of experience raise my cash requirement?
Yes, through the leverage tier. With fewer than two completed projects, leverage is 85% of project cost. Two or more raises it to 90%, and five or more to 93%. Every tier is capped at 75% of ARV, and figures vary by lender, property, and experience.
How much contingency should a first flip carry?
Plan on 10% to 15% of the rehab budget, held in your own cash. The lender pays only what is in the approved budget, so overruns never come from the loan. A first renovation usually deserves the upper end.
Do hard money lenders require a certain credit score?
The program minimum is 620, with additional conditions below 660. Underwriting stays asset-based, so the property, plan, and exit still drive the decision. Credit affects which terms you are offered.
Does the exit have to be a sale?
No. Many investors refinance into long-term rental financing after stabilizing the property, and others sell. Either exit should be tested against a conservative appraisal or sale price before you commit.
Next Steps
Start with the full cash stack, not the equity gap alone. Itemize the rehab, size contingency in cash, and test the exit against a soft appraisal. Hard money loans are business-purpose loans for investment property, so the file is reviewed on the project, not on a standard owner-occupied mortgage.
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. As a broker, Lendmire arranges financing through select lenders in its wholesale network across 41 markets, including Washington, D.C.
For a step-by-step look at assembling a first file, see Lendmire’s piece How to Get a Hard Money Loan for a First Flip With No Track Record.
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
1. NAR: Remodeling Projects That Offer the Best Value at Resale
2. HousingWire: Home Flipping Report
3. WRE News: Home Flipping Returns and ATTOM Profit Margin
This article is part of Lendmire’s hard money loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Hard Money Maximum Loan Amount Requirements for a Flip · How to Budget Down Payment and Rehab Cash on a Hard Money Flip · How to Apply for a Hard Money Bridge Loan as a First-Time Investor
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.