The Quick Read: A fix and flip file comes down to five document groups: the signed purchase contract and property file, a line-item rehab budget with a draw plan, your identity and credit authorization, the LLC’s entity records, and proof of cash for the down payment and reserves. Lenders read this packet to judge the property, the plan, and the exit more than your paycheck.
- The rehab package is what makes this file different from a rental loan.
- Leverage is measured against project cost and capped at 75% of the after-repair value, and the top tier requires a track record.
- Rehab money arrives as draws, which are staged payments released after completed work, so you need cash beyond the down payment.
- Entity records built for this loan carry forward to your next one.
Key Terms Defined
Short definitions first, so the rest reads cleanly.
After-repair value (ARV): the property’s expected sale value once the work is finished. It is the number that caps your loan.
Loan-to-cost: the loan as a share of total project cost, meaning purchase price plus rehab budget. Hard money leverage is usually quoted this way.
Scope of work: the itemized list of repairs, by area and trade, that the budget is built on.
Lien waiver: a signed statement from a contractor or supplier that they have been paid and will not claim a lien against the property for that work.
Loss payee: the party named on your insurance policy who gets paid first if the property is damaged. On a loan, that is the lender.
Personal guaranty: your personal promise to repay if the LLC does not. Many lenders ask for one even when the LLC is the borrower.
Track record: a summary of the projects you have completed. Lenders also call it a real estate resume or a schedule of real estate owned.
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 the Paperwork Looks Different From a Rental Loan
Hard money underwriting is asset-based. The lender studies the property, the plan to improve it, and how you will exit. Your personal income takes a back seat, and some lenders do not collect full income documents at all.
That does not mean light paperwork. Here is the catch: the file is heavy on the deal and the entity instead of your pay stubs.
Contrast that with a long-term rental loan. Those files qualify primarily on property-level rental income covering the payment, subject to lender guidelines, and the property is already finished and leased. A flip is a moving target. The lender has to believe in a building that does not yet exist in its final form.
So the packet answers four questions in order:
1. What is the property worth today, and what will it be worth after the work?
2. Is the budget realistic, and who is doing the work?
3. Who is borrowing, and have they done this before?
4. Does the borrower have the cash to start, and to keep going between draws?
Every document below maps to one of those questions.
The Whole Packet at a Glance
Requirements differ across the wholesale network, and individual lenders swap items in and out. This table shows the pattern.
| Document group | What it proves | Needed when |
|---|---|---|
| Purchase contract, title, insurance | You control a real, insurable asset | Application through closing |
| Valuation and ARV support | The exit value is believable | Underwriting |
| Scope of work, budget, bids | The plan is realistic | Underwriting |
| ID, credit authorization, entity records | Who is borrowing, and that the entity exists | Application through closing |
| Bank statements, proof of funds | You can fund the gap and cover reserves | Underwriting |
| Invoices, photos, lien waivers | Work was done and paid for | Each draw |
The Property and Deal File
Start with the executed purchase contract, including every addendum. Without it, the lender cannot judge leverage or see the purchase price that anchors the loan.
Next comes valuation. The lender wants both an as-is value and support for the ARV, usually through an appraisal or a broker price opinion. Your own comparable sales help here. Choose recent sales of similar finished homes near the property, and explain any adjustments in a sentence or two. A comp set that cherry-picks the highest sale on the street gets noticed.
ARV matters more than any other number in the file. It sets the ceiling, and an optimistic ARV can sink a deal before funding.
During the rehab, lenders commonly want a builder’s-risk or hazard policy that names them as loss payee. Order insurance early. A missing loss-payee clause is among the most common reasons a file stalls at the finish line.
Finally, send photos and a plain description of the property’s condition. They help the valuation and let the lender compare the budget to what is actually wrong with the house.
The Rehab Package (Where Files Win or Stall)
This is the part that most differs from a rental loan, and it is where thin files get exposed.
Scope of work. Many lenders hand you their own template, broken out by area and trade. Use it if offered. Itemize. A line that reads “interior remodel” gives a draw inspector nothing to verify. Compare that with this pair:
Weak line: Interior remodel.
Stronger line: Kitchen, replace cabinets, countertops, sink, and appliances, completed before flooring starts.
Budget. Every scope line gets a cost. Lenders test the numbers for realism, and sometimes the process stops because the property is too far gone or the budget is not believable. Build in a contingency line. Rehab budgets that assume nothing goes wrong tend to read as inexperience.
Draw schedule. This document says what work will be done by when, and it is often prepared with your general contractor. Break the project into stages. The lender releases money after each stage is inspected.
Contractor bids, license, and insurance. Expect to provide itemized bids, proof of licensing where your jurisdiction requires it, and the contractor’s insurance. If you are your own contractor, say so plainly and show your track record. Hiding it helps nobody.
The structure matters because up to 100% of the rehab budget can be funded through draws against completed work. That figure is a rehab-budget measure, not a purchase loan-to-value. The money is reimbursement for finished work, not cash handed over at closing.
Borrower and Entity Records
Most flips are borrowed through an LLC, subject to lender program eligibility. The entity file usually includes:
- Articles of organization.
- The operating agreement.
- The EIN letter.
- A certificate of good standing.
- Proof of who has authority to sign for the entity.
The most common slip is mismatched names. The LLC on the contract, the insurance policy, the bank account, and the title commitment must be spelled identically. One missing “LLC” or a stray comma can trigger a correction round.
On the personal side, expect a government ID for every signer, a credit authorization, and a loan application. The minimum credit score on the program typically starts at 620, with additional conditions below 660, and varies by lender, property, and experience. Credit plays a role, but the property carries most of the weight.
Track record. This is a one-page schedule of past projects: address, purchase and sale dates, and what was done. It does more than win approval. It sets your leverage tier.
Proof of cash. Send recent bank statements that show the down payment, the closing costs, and reserves. Lenders want to see where the money came from, so explain any large deposit before they ask. Cash matters twice on a flip. You fund the gap at closing, and you front rehab costs between draws.
Does Your Experience Change the Leverage?
Yes. Leverage on a fix and flip is loan-to-cost, and the tier depends on documented completed projects. These are typical figures, and they vary by lender, property, and experience:
- 5 or more completed projects: up to 93% of project cost.
- 2 or more completed projects: up to 90% of project cost.
- Fewer than 2: up to 85% of project cost.
Every tier is capped at 75% of ARV. First-time investors qualify at the lower tier, and the top tier is reserved for experienced investors. Bridge purchases without a rehab can reach up to 80% of the purchase price. Refinances run lower, up to 65% of value.
Run it on percentages. Take the 90% tier. Once project cost climbs above roughly 83% of the ARV, the 75% ARV cap becomes the binding limit, not the tier. That is why weak comps hurt twice: they shrink the ARV and the loan with it.
There is no true 100% purchase program here. The rehab can be funded to 100% through draws, but the purchase side always needs your equity.
Experience note: On files like this, the strongest packets tend to arrive with the budget, the bids, and the insurance quote already lined up, so underwriting can stay on the numbers. The weakest arrive in pieces, and every missing item reopens the file.
The Business-Purpose Paperwork
Hard money loans are designed for non-owner-occupied investment properties, typically one to four units. Because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage, and the consumer-mortgage disclosure forms do not apply.
That is why lenders collect a business-purpose statement and entity records. A creditor has to decide, file by file, whether a loan is primarily for a business purpose, per the CFPB’s Regulation Z commentary. Compliance Alliance points out that the test looks at the purpose of the loan, not just how the property is used. So an investment property is not automatically exempt. This article covers business-purpose flips only.
What You Sign, and What You Send Later
Documents you sign at closing usually include:
- The promissory note, your promise to repay.
- The deed of trust or mortgage, which secures the loan against the property.
- The loan agreement, which sets the terms, including the rehab and draw rules.
- The personal guaranty, if the lender requires one.
- A draw or rehab agreement, if it is separate from the loan agreement.
Read the draw terms line by line. They govern how you get paid for the next eighteen months of work at most, since terms run 6 to 18 months, interest-only, with no prepayment penalty. Check who orders the inspections, how a draw request is submitted, and what happens if the work runs past the term.
After closing, each draw request typically needs invoices, an updated budget, progress photos, and lien waivers. An inspector confirms the work exists. That is not a permit or code sign-off, so keep your own permit records separate. Lenders differ here. Some require lien waivers on every draw, and others do not. Collect them anyway.
No regulator sets one draw system. Lenders run different but similar versions, and that is the reason to read yours before you sign.
Where the General Rule Breaks
Purchase-only versus a rehab file. A bridge purchase with no rehab has fewer conditions. There is no scope of work, no draw schedule, and usually no inspection.
A new LLC. A recently formed entity is fine, but its records need to be complete and consistent. Expect the lender to lean on the personal guaranty and your track record.
First-time flippers. You prepare the same documents as everyone else, but your leverage tier is lower and the budget and bids get closer scrutiny. This is a genuine toss-up for some beginners: the lower tier costs more cash up front, yet a modest first project is often the best way to build the record that unlocks the next tier.
Partnerships. Every partner with meaningful ownership typically supplies ID and a credit authorization. The operating agreement must say who can sign.
Refinances. Swap the purchase contract for a payoff statement, and expect leverage up to 65% of value. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
Larger loans. Loan amounts run up to $5,000,000, larger by exception, and smaller balances vary by lender. The bigger the loan, the more the file looks like a commercial deal.
Properties outside the box. Collateral is non-owner-occupied residential property of one to four units, with ground-up construction up to 10 units. Commercial, land, and owner-occupied properties are not offered.
Footprint. Lendmire arranges these loans through select lenders in its wholesale network, across 41 markets including Washington, D.C.
What Stalls a File
1. Bank statements that are stale or missing pages.
2. Entity names that do not match across documents.
3. Insurance without the lender named as loss payee.
4. A vague scope of work with round-number costs.
5. An unlicensed or uninsured contractor.
6. Comps that do not support the stated ARV.
7. Large unexplained deposits.
8. No cash left to carry the project between draws.
What the Decision Looks Like in Practice
Think of the packet as three tests. Can the property support the ARV you claim? Can the plan be completed for the budget you wrote? Can you, as an entity and an operator, carry it? When the answer to all three is documented, the file reads cleanly.
If you are brand new, spend your preparation time on the rehab package and the cash story. If you are experienced, spend it on the track record, since a second or fifth completed project moves your leverage tier.
The exit shapes paperwork too. A flip sells, so the file is about ARV. A rental hold is different. Many investors refinance out of hard money into long-term rental financing once the property is stabilized, and Lendmire brokers that path. The LLC records you assembled for the bridge loan carry forward. For a look at that next step, see the complete DSCR loans guide.
Two related questions come up often. One is whether a single-family flip can get approved for hard money. The other is whether an out-of-state investor should use hard money to fix and flip.
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.
Frequently Asked Questions
Do I need traditional personal-income documentation and pay stubs for a hard money flip?
Often not. Hard money underwriting looks at the property, the plan, and the exit rather than personal income. Lenders do still ask for ID, a credit authorization, and bank statements. Some request more, so ask which items your lender requires before you gather them.
Can a first-time flipper get a hard money loan?
Yes, at the lower leverage tiers. First-timers qualify with fewer than 2 completed projects at up to 85% of project cost, always capped at 75% of ARV. Expect closer review of the budget, the bids, and your cash reserves. Terms vary by lender, property, and experience.
What if I do not have an LLC yet?
Form one before you apply, and keep the name consistent on every document. Your lender may be able to work with a personal borrower on some files, but entity records are the most common conditions that stall a file. A new LLC is acceptable, subject to lender program eligibility.
How does the lender use the rehab budget?
It tests the budget for realism, then uses it to set the draw schedule. Up to 100% of the rehab budget can be funded in draws against completed work. Funds are released after each stage is inspected, which means you front costs between draws.
What changes if I refinance a flip instead of buying one?
The purchase contract gives way to a payoff statement, and leverage drops to up to 65% of value. The entity, ID, and cash documents are the same. If the property is a hold, some investors later refinance into long-term rental financing.
About Lendmire
Lendmire (NMLS# 2371349), a non-QM mortgage broker serving investors in 41 markets including Washington, D.C., helps structure DSCR scenarios commonly evaluated around a property’s rental income rather than personal income paperwork, subject to lender guidelines. A Scotsman Guide Top Mortgage Workplace in 2025 and 2026, Lendmire places loans through wholesale investor lenders and is not a direct lender.
The exit plan matters as much as the purchase price on short-term financing – see the hard money loan overview.
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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
2. Compliance Alliance, Regulation Z and Investment Properties
This article is part of Lendmire’s hard money loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Can You Have More Than One Fix and Flip Hard Money Loan at Once? · Can You Use a Hard Money Loan to Buy and Flip a House? · Can a Business Owner Qualify for a Larger Hard Money Flip Loan?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
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- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.