The Quick Read: A hard money lender reviews the property’s rental income, the borrower and the exit, so the seller matters through the contract, the title, the payoff of any existing liens and the access the appraiser needs, and when the flipper sells the finished house, the buyer’s loan type can set rules the flipper must follow.
- The lender wants a fully signed purchase contract with the owner of record, and a clear chain of title behind it.
- Any lien on the seller’s side must be paid or released at closing so the new lender holds a first lien.
- Wholesale assignments, double closes and seller financing each add documents, and none of them is a bar by itself.
- On the exit side, the payoff statement comes from the title company, and an FHA-financed buyer brings a federal resale-seasoning rule.
- Leverage, credit and experience tiers still decide the loan. The seller’s file only decides whether the deal can close.
Who Is the Seller in a Flip?
A flip has two sellers. The first is the party selling the flipper the property. The second is the flipper, who sells the finished house to a retail buyer or an investor.
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.
No published rulebook is titled seller requirements for hard money. The seller’s role comes from how asset-based underwriting works. The lender lends against a property, a plan and an exit. The seller controls the property’s legal title, its lien history and the date it can be delivered.
Across the wholesale network of lenders that Lendmire works with, the borrower-side tests are consistent. Fix-and-flip leverage typically runs 85% of project cost for investors with fewer than two documented completed projects, 90% at two or more, and 93% at five or more. Every tier is capped at 75% of after-repair value. Up to 100% of the rehab budget funds in draws against completed work. Terms run 6 to 18 months, interest-only, and a 620 credit score is the typical floor with added conditions below 660. All of this varies by lender, property and experience, and nothing here is a commitment to lend.
The seller does not change those numbers. The seller decides whether the file can get from signed contract to funded loan.
What the Lender Needs From the Seller
The lender needs four things from the seller’s side: an enforceable contract, marketable title, access to the property and a closing date that fits the loan.
An executed contract with the owner of record. The lender prices the deal from the contract. The contract has to be signed by the buyer and the seller. The seller’s name has to match the name on title. A lender will ask early whether a property is under contract at all, because everything else keys off that document.
Title that can be insured. Only the legal title holder can pledge a property. The lender needs the owner’s signature on the deed that moves title, and the borrower’s signature on the new mortgage or deed of trust. Liens, judgments and old mortgages have to be resolved before the loan funds. If a payoff is missed, the new lender is stuck in second position, and most hard money programs will not fund that way.
A price history that makes sense. Lenders look at what the seller paid and how recently. A large jump between the seller’s purchase price and the contract price draws questions. So does a sale between related parties. The lender wants to see that the price is a market price and that the value supports it.
Access for valuation. Most lenders want an appraisal or a broker opinion of value. That needs a seller who will let the appraiser, the contractor and sometimes the insurance inspector into the property. A seller who refuses access can stall a file for reasons unrelated to the borrower.
A closing date the seller can hit. The initial advance funds the purchase. The rehab money stays in a holdback and is released in draws as work is completed and verified. If the seller needs more time to clear a lien or vacate, the lender may need updated title work, and the contract may need an extension.
Who Provides What
| Item | Borrower | Property seller | Title company | Lender |
|---|---|---|---|---|
| Signed contract | Provides | Provides | Receives | Reviews |
| Entity documents | Provides | N/A | Reviews | Reviews |
| Payoff of seller liens | N/A | Authorizes | Orders and pays | Confirms |
| Property access | Coordinates | Grants | N/A | Orders valuation |
| Rehab budget and scope | Provides | N/A | N/A | Reviews |
| Deed and closing documents | Signs mortgage | Signs deed | Prepares | Funds |
The table shows the main point. Most of the file sits with the borrower. The seller’s items are few, but each one can hold up the file.
Seller Types and What Changes
The type of seller changes which documents the lender asks for and how much cooperation to expect.
| Seller type | What the lender looks for | Common friction |
|---|---|---|
| Owner-occupant | Clean title, payoff letters | Missed lien payoffs, delayed move-out |
| Estate or probate | Authority to sell, court or personal-representative documents | Signatures from multiple heirs |
| Bank-owned or institutional | Standard contract, title commitment | Fixed addenda, limited access before closing |
| Wholesaler (assignment) | Original contract, assignment, fee on settlement statement | Extra documentation on the spread |
| Land-contract seller | Payoff of the seller’s balance, deed delivered at closing | Seller must be willing to sign the deed |
Owner-occupants are the simplest case because the owner of record is the seller. Estates add paperwork about who has authority to sign. Institutional sellers usually bring their own contract language, which the lender reads like any other.
A Flip Traced From Contract to Funding
Run through a hypothetical file with modeled inputs. An investor with one completed flip goes under contract on a 1-4 unit non-owner-occupied house. That puts the file in the fewer-than-two-projects tier, which typically runs 85% of project cost, capped at 75% of after-repair value.
The steps look like this.
1. The investor submits the signed contract, the rehab budget, comps for the after-repair value and the entity documents.
2. The lender orders title work. The preliminary report shows an old mortgage still recorded against the seller.
3. The seller signs a payoff authorization. The title company requests the payoff statement and shows it as a line on the settlement statement.
4. The appraiser gets access. The seller’s agent coordinates a time.
5. The lender checks the price history. The seller bought the house recently at a lower figure, so the lender asks for an explanation of the gap and the condition at purchase.
6. The loan funds the purchase portion. The rehab portion stays in holdback for draws.
Nothing in that file is unusual. What kept it clean was the payoff authorization and the price-history explanation, both ready before the lender asked. What would have stalled it was a seller unwilling to pay off the old mortgage at closing.
Wholesale Assignments and Double Closes
A wholesale assignment gives the end buyer the contract without the wholesaler ever taking title. The title company pays the assignment fee at closing, and both sides see it on the settlement statement. A lender funding the end buyer may ask for the original contract and the assignment, and wholesale deals draw extra review in practice.
A double close is different. The wholesaler buys the property from the owner and sells it to the end buyer in back-to-back closings. Short-term transactional funding sometimes covers the first closing, and the second closing repays it the same day. A lender funding the second closing will typically want to see both contracts. A double close hides the spread from the parties but not from the lender.
Two points keep this in proportion. Most wholesale deals never need transactional funding, since it matters mainly when a contract cannot be assigned. And some title companies are unfamiliar with double closes and decline them. Rules on assignment also vary by state, so confirm local law with the title company and an attorney before choosing a structure.
Seller Financing and Land Contracts
When the seller carries part of the price, the lien order becomes the issue. A hard money lender wants a first lien. If the seller holds a note, the seller usually has to take a junior position or be paid off. Lendmire’s piece How a Lender Reads a Seller-Carried Note on a Hard Money Loan covers that structure in detail.
A wrap note adds an underlying mortgage that stays in place. That changes which lien the new lender can accept, and Lendmire’s explainer How a Hard Money Lender Reads a Wrap Note on a First Flip walks through it.
A land-contract seller is the cleanest example of the title rule. The seller holds legal title until the deed moves. The new loan pays off the seller’s balance at closing, and the seller has to be willing to sign the deed. If the seller will not sign, the lender cannot get its lien.
When You Are the Seller of the Finished Flip
On the exit, the seller is the flipper. The mechanics are simple on the lender side. The investor lists, a buyer contracts, and the title company asks the hard money lender for a payoff statement. Sale proceeds retire the loan at closing, and the rest goes to the investor. The lender releases its lien once it is paid. If a lien is not paid or properly released, it creates a title defect for the buyer.
The buyer’s loan type is where rules appear. A property resold shortly after the seller’s acquisition is not eligible for FHA mortgage insurance unless an exemption applies, according to HUD’s property flipping page. The clock runs from the date the seller took legal title to the date the FHA sales contract is signed. The same page says a second appraisal is required on certain resales in the months after acquisition when the price crosses a resale-price threshold. For resales within the first year after acquisition, the original federal rule lets HUD require added value documentation when the price is meaningfully above the lowest sale price in the prior 12 months.
Several points follow in practice. The rule applies to FHA financing, and HUD’s pages do not extend it to DSCR or other investor loans. Exemptions exist, such as an initial sale by a builder, so a buyer’s lender should confirm whether one applies. And a flipper can list and negotiate early, but an FHA buyer cannot sign a contract until the window has passed. HUD suspended the rule for several years at one point and later restored it, so confirm the current version with the buyer’s lender.
The exit decides who can buy. In the first quarter of the most recent report, HousingWire’s coverage of ATTOM data shows cash buyers made up 61.1% of flip purchases and FHA buyers 10.2%. Margins are thin too: ATTOM’s latest release puts typical gross profit at $60,526 and the gross return at 21.5%. That is purchase price against resale price. It excludes rehab, financing, taxes, insurance and carry.
Where the General Rule Breaks
Delayed financing. It is built for cash purchases. A hard money purchase leaves a lien on the property, which breaks the cash-purchase fact pattern, so it generally does not rescue a hard money exit.
Loan matures before seasoning clears. Terms run 6 to 18 months. If the flip stalls and the investor wants to keep the property as a rental, the fallbacks are an extension of the note or a payoff-only refinance. Seasoning on a refinance is lender policy, not a federal rule, and it commonly runs from the recorded deed date rather than rehab completion.
The DSCR exit. Many investors refinance out of hard money into long-term rental financing once the property is stabilized, and Lendmire brokers that path. The details are in the complete DSCR loans guide. Across most of the network, a cash-out refinance tops out around 75% LTV on a standard rental, with about 6 months of seasoning commonly expected. Coverage is rent against the new loan’s payment only, so the old hard money payment does not count. Clearing the coverage ratio is also not the same as positive cash flow, because repairs, vacancy and management sit outside the calculation.
Property type. Hard money collateral is non-owner-occupied residential of 1-4 units. Commercial, land, lots and owner-occupied property are not on the sheet.
What Stalls a Seller-Side Closing
- A lien or judgment that surfaces late in the title report.
- A seller who does not authorize the payoff.
- A contract signed by someone who is not the owner of record.
- An assignment with no copy of the original contract.
- A seller who refuses appraiser or contractor access.
- A seller-financed note that insists on first position.
- A recorded prior lender lien that was never released.
Each one has the same fix. Surface it before the lender’s review and have the document ready. Clean title and clear seller identity matter more than almost anything else on the seller side, followed by price documentation, the after-repair value support, a realistic rehab budget, the borrower’s liquidity and track record, and a credible exit.
The Investor Decision in Practice
Start with the seller before the lender. Confirm the seller is the owner of record, ask for the title report early and learn what liens exist. Then match the loan to the file. A first-time flipper with a clean owner-occupant seller needs the standard package. A buyer of a wholesale contract should expect to supply the original contract and the assignment. A buyer working with a seller-financed deal should settle lien position before applying.
On the exit side, decide the buyer pool before listing. If the plan depends on FHA buyers, count the seller’s own acquisition date and keep it in view. If the plan is a rental exit, line up the long-term financing before the bridge note matures.
Key Terms Defined
Owner of record: The person or entity whose name appears on the recorded deed as the legal owner.
Chain of title: The recorded history of ownership transfers on a property, which the title company reviews.
Assignment: A sale of the buyer’s rights under a purchase contract, so the end buyer takes the contract without the wholesaler taking title.
Double close: Two back-to-back closings in which the wholesaler buys from the owner and then sells to the end buyer.
Transactional funding: Short-term money that covers the first leg of a double close and is repaid from the second.
Payoff statement: A lender’s written figure for what it takes to retire a loan on a given date, ordered by the title company.
After-repair value (ARV): The estimated value of the property after the planned rehab is finished.
Seasoning: The ownership period a lender expects before it will refinance a property, set by lender policy.
Talk Through the File
If you are buying, rehabbing or refinancing an investment property 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
Does the seller need to know I’m using hard money?
The seller will see it indirectly, since the contract, the lender’s title requirements and the closing date all reflect the financing. The seller does not approve the loan, but a seller who must pay off a lien or give access has to cooperate. Many contracts simply state the financing type.
What if the seller’s title is not clean?
Liens and judgments have to be resolved before closing, usually by paying them from the seller’s proceeds at the table. If a defect cannot be cleared, the lender cannot get a first lien and the deal usually cannot fund on that structure.
Can I buy an assigned contract with hard money?
Often yes, subject to lender guidelines. Expect the lender to ask for the original contract and the assignment, since wholesale deals draw extra documentation and review.
Can the seller stay in a junior position?
Sometimes. A seller who carries part of the price may accept a second-position lien behind a first-lien hard money loan. That depends on the lender, the loan size and the terms of the note.
Does the FHA 90-day rule apply to every buyer of my flip?
No. It applies to FHA-financed buyers, and HUD’s pages do not extend it to cash buyers or investor loans. The window runs from when you took title to when the FHA sales contract is signed, and the buyer’s lender should confirm any exemption.
What does the lender need from me when I sell?
A payoff statement from the lender, ordered through the title company, and a lien release once it is paid. The sale proceeds retire the loan at closing.
For current guidelines and terms, see Lendmire’s DSCR loan programs page.
About Lendmire
A non-QM mortgage broker (NMLS# 2371349), Lendmire arranges DSCR financing for real estate investors in 41 markets — 40 states plus Washington, D.C. Because deals are underwritten primarily on property cash flow rather than personal income documentation, the structure suits self-employed buyers and entity-owned portfolios. Lendmire places loans through wholesale investor lenders; it is not a direct lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
Get Started
Ready to find the right loan for you?
In about 30 seconds you can review financing options available for your investment property. No commitment required.
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. HUD – What Is HUD Doing about Property Flipping?
3. HousingWire’s coverage of ATTOM data
4. ATTOM – Home Flipping Profits Release
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 Get an Interest-Only Hard Money Loan for a Fix and Flip? · Can an Investor Find a Hard Money Lender for a Fix and Flip? · Can a 1099 Contractor Get a Hard Money Loan to Flip a House?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.