The Quick Read: Hard money lenders underwrite the deal (the property, the rehab plan, and the exit) more than the borrower’s résumé, so a first flip with no track record can still be financed. Experience mostly changes leverage and cost, while credit, cash, and deal quality decide whether a file moves forward at all.
- Across Lendmire’s wholesale network, fix-and-flip leverage with fewer than 2 completed projects typically runs up to 85% of project cost, capped at 75% of after-repair value.
- A 620 credit score is the typical minimum, with added conditions below 660. Terms vary by lender, property, and experience.
- Rehab money arrives in draws against completed work, so a first-timer fronts early costs.
- The property must be non-owner-occupied residential, 1-4 units.
- None of this is a commitment to lend. Every file is underwritten individually.
Do You Need a Track Record?
No, not for eligibility at most programs. Many lenders fund first-time investors because the loan rests on the asset. What a thin record costs you is leverage: the network’s top tiers are reserved for investors with documented completed projects. Fewer than 2 completed projects lands in the 85% of project cost tier. Two or more steps up to 90%, and five or more reach 93%. Every tier stays capped at 75% of after-repair value (ARV).
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.
Here’s the catch. Some institutional lenders and funds do still require a completed project before they will look at a file. A borrower who gets a flat no from one lender has not hit a universal wall. Programs differ widely, and a broker who sees many lenders’ guidelines can steer a first file toward the ones that adjust terms rather than decline.
What Lenders Actually Underwrite
Hard money underwriting asks four questions, in roughly this order of weight:
1. The deal. Is the purchase price sensible against the ARV, and does the margin survive a slow sale?
2. The plan. Is the scope of work and budget realistic, and does the timeline fit a 6-18 month interest-only term?
3. The exit. Will the property be sold, or refinanced into long-term financing?
4. The borrower. Credit, liquidity, and any related background.
The first three are about the property. The last one is where a first-timer is thinnest, so the other three need to be strong.
Hard money flip loans are business-purpose loans on investment property. They are reviewed differently from a standard owner-occupied mortgage.
The Requirements, One by One
| Requirement | Why lenders ask | What to prepare |
|---|---|---|
| Credit | Signals repayment behavior | 620 minimum; more conditions below 660 |
| Cash | Covers the gap to the caps | Proof of funds, seasoned and sourced |
| Entity | Business-purpose loan | LLC documents |
| Property | Collateral fit | Non-owner-occupied, 1-4 units |
| ARV and scope | Sets the loan ceiling | Contract, comps, budget, scope of work |
| Exit | How the loan is repaid | Sale plan or refinance plan |
Credit still matters on an asset-based file. It simply carries less weight than the property. Below 660, expect added conditions, and parameters vary by lender, property, and experience.
Property type is a hard line. The network funds non-owner-occupied residential, 1-4 units. Commercial, industrial, land or lots, hospitality, and owner-occupied properties are not offered.
Loan size runs up to $5,000,000, with larger by exception. Smaller balances vary by lender.
How Much Cash You Really Need
Hard money is not zero-down. Cash needs come in buckets:
- The gap to the leverage caps. On a first flip at 85% of project cost, you fund the remaining 15%. The 75% ARV cap can bite first.
- Lender and closing costs, paid in cash at closing.
- Reserves to carry the interest-only payments.
- Early rehab costs, because draws reimburse completed work.
- A contingency for overruns and delays.
The phrase “100% financing” confuses many beginners. In the network, up to 100% of the rehab budget funds in draws against completed work. That is a rehab-budget figure, not a purchase loan-to-value. There is no true 100% purchase program. Nav’s investor explainer describes the same structure as high loan-to-cost plus rehab funding, still capped against ARV.
Market surveys report first-time leverage tiers that differ from program to program. The network figure is the one above: up to 85% of project cost with fewer than 2 completed projects, capped at 75% of ARV.
Which Cap Controls: Cost or ARV?
The lower of two caps controls the loan. One limits the loan as a percentage of project cost (purchase plus rehab). The other limits it as a percentage of ARV.
Run it this way, using modeled assumptions rather than sourced figures. Picture a flip where the purchase price is modest but the rehab is heavy, and the projected resale value is only moderately above total cost. The cost cap may allow a large loan, but 75% of ARV lands lower. The investor’s cash gap is then bigger than the leverage headline suggested.
That is why the ARV matters so much. Lenders typically verify it themselves through an appraisal, a broker price opinion, or a comparable-sales review. Your own comps help you pitch the deal, but they are not the number the lender uses. One SEC-filed lender disclosure, Groundfloor’s Regulation A offering, ranks borrower-supplied comps as the lowest-quality valuation report on that platform. That reflects one platform’s grading, not a universal rule, but it shows how the ARV gets treated.
The Cash Timeline: Closing, Draws, Payoff
Cash leaves your account in stages, and the middle stage is where first-timers run short.
1. At closing: your equity contribution, lender costs, and closing costs.
2. Before the first draw: you start the work with your own money.
3. At each draw: completed work is inspected, then funds are released against it.
4. Between draws: inspection and payout can lag, and you carry contractor payments and interest in the meantime.
5. At exit: principal is due, and interest stops accruing.
Fewer, larger draws usually mean less fee friction but more cash fronted per phase. More draws smooth the cash trough but add inspection steps. A first-timer with thin liquidity should plan for the trough, not just the total. Some lenders also charge interest on the full loan balance from closing, so check how interest is calculated on undrawn rehab funds.
How to Offset Having No Track Record
You can’t manufacture history, but you can substitute for it. Practitioners in the network see these levers work, roughly in order of strength:
| Lever | What it does | Tradeoff |
|---|---|---|
| Experienced partner or co-borrower | Borrows a record | Shares profit and control |
| Licensed general contractor | Credibility on scope and budget | Contractor cost is real |
| Smaller, cosmetic scope | Lowers execution risk | Smaller upside |
| More cash in the deal | Lowers leverage | Less capital for the next flip |
| Related background | Shows relevant skill | Helps, but never replaces a record |
Related work, such as construction management, project management, or managing contractors, belongs in the file. It will not move you up a leverage tier. Documented completed projects do that.
Can You Be Your Own Contractor?
Sometimes, on simple work. Lender requirements vary a lot. A licensed general contractor is more likely to be expected on bigger or more complex projects. Experience can relax that on cosmetic rehab. For a first flip, the stronger play is usually a licensed GC, because the lender is also reviewing your scope of work against the target ARV, and a credible builder makes that review easier.
Picking a Lender-Friendly First Project
| Friendlier first flip | Riskier first flip |
|---|---|
| Cosmetic scope | Structural or permit-heavy work |
| Clear comps nearby | Few or mixed comps |
| 1-4 unit residential | Anything outside program property types |
| Margin that survives a delay | Margin that needs everything to go right |
Margins matter more than most first-timers expect. ATTOM’s Q2 flipping report shows a typical flip earned a 21.5% gross margin, down from 27.6% a year earlier, and took 161 days from purchase to resale. Gross profit excludes rehab, financing, taxes, and insurance. FAIRS’s coverage of the same report puts the best typical return, 28%, on properties bought for $100,000 to $200,000.
Stress test before you apply. Add a two-to-four-week draw delay, a budget overrun, and a one-term extension to your model. If the deal only works on the happy path, it is not a first deal.
Your Application Package
Lenders want a complete file. Typical contents:
1. Purchase contract
2. Scope of work and line-item budget
3. Comparable renovated sales
4. Photo ID and LLC documents
5. Bank statements as proof of funds
6. Any related experience or partner background
7. A written exit plan
Pick the lender before you make offers, and get pre-approved so the letter can go in with the offer. “Asset-based” does not mean “undocumented.” Qualification still depends on the borrower, property, and lender.
What Stalls First Files
- Cash short of the true gap. Fix it with more equity or a smaller deal.
- Thin margin. Renegotiate the price or trim scope.
- Credit below 660. Expect added conditions, so budget for them early.
- Wrong property type. Owner-occupied or outside 1-4 units is a hard stop.
- An ARV the lender won’t support. Re-run it on tighter comps.
Exit Options and When Hard Money Is the Wrong Tool
The term runs 6-18 months, interest-only, with no prepayment penalty. There are no multi-year options on the current program. Time, not anything else, is what erodes flip margins.
Exit one is a sale. Exit two is a refinance. Many investors who decide to keep a flipped property refinance out of hard money into long-term rental financing once it’s stabilized, and Lendmire brokers that path. Whether the rental would clear the coverage test is worth checking before you buy. The complete DSCR loans guide covers the long-term side.
Hard money is the wrong tool when the plan is to buy and hold with little rehab, when the margin can’t absorb short-term financing cost, or when you can’t fund the cash gap. In those cases, a partner or a smaller project may serve a first-timer better.
Key Terms Defined
ARV (after-repair value): The estimated market value of the property once renovations are complete.
Loan-to-cost (LTC): The loan as a percentage of purchase price plus rehab budget.
Draw: A release of rehab funds after the lender confirms completed work.
Interest-only: A loan structure where you pay interest during the term and principal comes due at the end.
Scope of work: The itemized description of planned renovations and their costs.
Proof of funds: Bank documentation showing you hold the cash the deal requires.
Frequently Asked Questions
Can I get hard money for my first flip with fair credit?
Often yes. A 620 score is the typical minimum in the network, with added conditions below 660. A stronger deal, more cash, or an experienced partner can offset a thinner credit profile.
What leverage should a first-timer expect?
Up to 85% of project cost with fewer than 2 completed projects, capped at 75% of ARV. The 90% and 93% tiers need 2+ and 5+ documented completed projects. Figures vary by lender and aren’t a commitment to lend.
Does hard money cover the rehab budget?
Up to 100% of the rehab budget can fund in draws against completed work. That is a rehab-budget figure, not a purchase loan-to-value, and you generally front early costs before reimbursement.
Do I need an LLC?
Most files are business-purpose, and lenders commonly want entity documents. Eligibility depends on program guidelines, so confirm the entity requirement before you structure the purchase.
What happens when the flip ends?
You sell, or you refinance. A property you keep as a rental can move into long-term DSCR financing, subject to lender guidelines and the property’s rental coverage.
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. An illustrative calculator is available on the site for rough estimates. Reach the team at 828-256-2183.
Tax treatment varies; consult a qualified professional before relying on any deduction.
For current guidelines and terms, see Lendmire’s hard money loan programs page.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage brokerage focused on investor financing, arranging DSCR loans in 40 states plus Washington, D.C. — 41 markets total. Qualification is based on the property’s income rather than personal income documentation, subject to lender guidelines, making it a fit for LLC-held rentals and scaling portfolios. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. Nav: hard money loans and 100% financing
2. SEC filing, Groundfloor Regulation A offering
3. ATTOM: Home Flipping Profits Continue Gradual Two Year Decline
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 Flip Loan vs Private Money for a First-Time Investor · How Much a Hard Money Lender Will Lend on a Fix-and-Flip · BRRRR Hard Money Lender Requirements for a DSCR Refinance Exit
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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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.