The Quick Read: A hard money lender sizes the loan to the collateral and the plan, so a landlord buying before selling typically sees up to 80% of purchase price on a bridge purchase, or up to 65% of value if the old rental is pledged. Both figures vary by lender, property, and experience. The lender cares about the property and the exit more than the move.
- On a no-rehab bridge purchase of a non-owner-occupied 1-4 unit property, leverage typically runs up to 80% of purchase price.
- Refinance and cash-out against an existing property typically tops out around 65% of value, so your old mortgage eats into usable equity.
- Fix-and-flip files are sized on project cost (85%, 90%, or 93% by experience), always capped at 75% of after-repair value.
- Terms run 6-18 months, interest-only, so the exit plan matters as much as the leverage.
- Nothing here is a commitment to lend. Every file is reviewed on its own.
What Does Hard Money Actually Lend Against?
Hard money lends against property, not paychecks. The collateral is usually the property you are buying. Sometimes the property you are selling is pledged as well. No lender uses a flat percentage of “what you are moving into.”
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.
Two measures drive the answer. Loan-to-value (LTV) compares the loan to what the property is worth today. Loan-to-cost (LTC) compares the loan to what the deal costs you, purchase plus rehab. They give different dollar answers on the same property, so ask which one a lender means.
Nav makes the same distinction. It notes that a “100% financing” pitch means 100% of cost, not 100% of value, and that the total loan must still fit under the lender’s after-repair-value (ARV) cap, usually 70-75%. That is a market-wide observation. Across the wholesale network Lendmire works with, the program figures are specific, and they are below.
- Bridge purchase, no rehab: up to 80% of purchase price.
- Fix-and-flip: 85% of project cost with fewer than 2 completed projects, 90% at 2 or more, 93% at 5 or more. Every tier is capped at 75% of ARV.
- Cash-out or rate/term refinance: up to 65% of value.
- Rehab budget: up to 100% funds in draws against completed work. That is a rehab-budget figure, never a purchase LTV.
- Loan size: up to $5,000,000, with larger loans by exception.
All of these vary by lender, property, and experience. There is no true 100% purchase program. The top leverage tier is reserved for experienced investors.
How Underwriting Treats a Buy-Before-Sell, Step by Step
Underwriting follows the same logic every time: pick the collateral, value it, size the loan to the tightest cap, then test the exit. Here is the sequence.
1. Choose the collateral. The lender takes a lien on the new property alone, or on both properties. Some lenders accept a lien on both. Others only want the new purchase.
2. Order the valuation. The lender orders an as-is appraisal. On a rehab, it also orders an ARV value based on renovated comparable sales.
3. Size to the lowest cap. The loan is the smallest of the percentage of price, the percentage of cost, and the percentage of value or ARV. If two properties are pledged, combined debt against both also has to fit.
4. Check the borrower. Underwriting stays asset-based, but a 620 minimum score applies, with additional conditions below 660. First-time investors qualify at the lower leverage tiers.
5. Test the exit. The lender wants a written plan: sell the old property, or refinance the new one into long-term financing.
6. Fund the work in draws. Any rehab money is released after completed work. You front the cost first.
Collateral must be non-owner-occupied residential, 1-4 units. Hard money is business-purpose lending. A home you live in is not eligible collateral.
Which Structure Fits: New Property Only or Both?
The new property alone is simpler. Pledging both properties lets existing equity stand in for cash. The choice decides how much cash you bring and how many things must go right at once.
| Factor | New property only | Both properties pledged |
|---|---|---|
| Collateral | Purchase only | Purchase plus old rental |
| Cash needed | Down payment plus costs | Can shrink if equity is usable |
| Old mortgage matters? | Not to sizing | Yes, it counts against the cap |
| Lender availability | Widest | Narrower, varies by lender |
| Main risk | Carrying two properties | Two liens on one exit |
Equity is simply property value minus what you owe on it. The CFPB uses that same definition in its explainer on home equity. In a two-property structure, usable equity is whatever sits between your existing payoff and the lender’s cap on that property.
A Worked Example in Percentages
These are modeled assumptions, not market data, and they use percentages only. The calculator can turn them into dollars for you.
Scenario 1, new property only. You buy a rental with no rehab, and the lender allows up to 80% of purchase price. You bring the remaining 20% plus closing costs from your own cash. The old rental’s equity plays no role. You still carry its payments until it sells.
Scenario 2, both pledged, light mortgage. Say your old rental is worth roughly what you are paying for the new one. Your existing mortgage equals 45% of its value. The refinance tier allows up to 65% of value, which leaves about 20% of value as usable equity. That is close to the down payment the new purchase needs. Cash at closing could drop sharply, though costs remain.
Scenario 3, both pledged, heavy mortgage. Same properties, but your existing mortgage equals 70% of value. That already sits above a 65% cap. Usable equity is zero, and the pledge adds nothing. You are back to Scenario 1.
Scenario 4, buy and rehab. A first-time flipper at fewer than 2 completed projects sees 85% of project cost, capped at 75% of ARV. The lower figure binds. If the rehab budget is large, the ARV cap usually binds first. Rehab funds then arrive in draws, so you need liquidity to cover each phase.
Where the General Rule Breaks
The 80% and 65% figures describe typical leverage, not what every file receives. Several situations pull the number down or off the table.
- An already leveraged old rental. If the existing mortgage uses most of the cap, pledging the property gives you nothing.
- Mixed-up percentages. An 85% or 93% figure is a share of project cost, not value. Read the label on every percentage you see.
- A vacant or unlisted old property. A property under contract makes a stronger exit than one with no listing. Lenders differ on how they treat this.
- Property type. Collateral must be 1-4 unit residential. Commercial, land, and owner-occupied property are not on the sheet.
- Footprint. Hard money is not available in every market. Confirm yours before you plan around it.
- Thin experience. The top leverage tier requires documented completed projects. Newer investors sit at lower tiers.
Hard money and bridge loans overlap, and the market uses the words loosely. A bridge describes the purpose, covering the gap between buying and selling. Hard money describes the source, an asset-based private lender. Our view is that for a landlord, a bridge-style purchase funded by hard money is the same product with two names.
Carrying the Overlap and Planning the Exit
The loan is only half the plan. The other half is how long you can afford to hold two properties and what ends the debt.
Terms run 6-18 months, interest-only, with no prepayment penalty. You pay interest during the term and repay principal at the end. A delay hurts most when the term is short. A property that takes three months longer to sell can eat most of a 6-month term. Plan for the slow case, not the average one.
There are three ways out.
1. Sell the old property. The sale pays off the hard money. Compare expected proceeds with the old payoff, the hard money balance, and selling costs. If the numbers only work at a perfect price, the exit is weak.
2. Refinance the new property. Many investors refinance out of hard money into long-term DSCR financing once the property is stabilized, and Lendmire brokers that path. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. Select programs start at 1.00 coverage, and stronger ratios open better terms. Cash-out refinances on standard rentals typically top out near 75% LTV, and lenders commonly expect about six months of seasoning. A longer explanation sits in the complete DSCR loans guide.
3. Hold the old property as a rental. If it rents well, you may not need to sell. Then the question becomes whether you want two rentals or one.
Clearing 1.00 coverage does not mean a property cash flows. DSCR compares rent to the full housing payment only. Repairs, vacancy, and management sit outside it.
Should You Do This? A Short Decision Test
Buying before selling works when the exit is clear and you can absorb a delay. It fails when everything depends on one sale closing on schedule.
Run through these checks:
- Does the old property have enough equity left after its mortgage and the lender’s cap?
- Can you carry both properties for the full term plus a delay without strain?
- Is the old property priced, listed, or already under contract?
- Would the new property meet long-term rental requirements if the sale falls through?
- Do you have the liquidity for your down payment, costs, and rehab draws?
If two or more answers are no, consider a smaller purchase or a longer plan. A different structure helps here too. How much a hard money loan lends on a paid-off property covers the opposite case, where there is no existing mortgage to net out.
Key Terms Defined
Hard money loan: A short-term, asset-based business loan from a private lender, secured by real estate.
Loan-to-value (LTV): The loan amount as a share of the property’s current value.
Loan-to-cost (LTC): The loan amount as a share of total project cost, purchase plus rehab.
After-repair value (ARV): The estimated value of a property after renovation, based on comparable sales.
Cross-collateralization: Pledging two properties to secure one loan.
Draw: A release of rehab funds after the lender confirms completed work.
DSCR: Debt service coverage ratio, meaning rent compared with the full monthly housing payment.
Frequently Asked Questions
Can hard money fund the whole purchase?
No. A bridge purchase without rehab typically reaches up to 80% of purchase price. Fix-and-flip leverage is measured against project cost and capped at 75% of ARV. You bring the rest, plus costs, subject to lender guidelines.
Does the lender look at the property I’m selling?
Only if you pledge it. In a purchase-only structure the new property is the collateral. When both are pledged, the old property’s value and its existing mortgage both count, and refinance leverage typically tops out around 65% of value.
What if my old property doesn’t sell before the term ends?
You need a backup. Options include an extension if the lender allows one, a refinance of the new property into long-term financing, or selling at a lower price. Terms run 6-18 months, so build in a margin before you commit.
Is hard money the same as a bridge loan?
For this use they are effectively the same product. A bridge describes the purpose, and hard money describes the lender type. Terms and leverage still vary by lender, property, and experience.
Can a first-time investor use this?
Yes, at the lower leverage tiers, with a 620 minimum score and added conditions below 660. The highest tiers need documented completed projects.
Next Step
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. Lendmire is a mortgage broker arranging financing through select lenders in its wholesale network, across 41 markets including Washington, D.C. Nothing here is a commitment to lend.
For current guidelines and terms, see Lendmire’s DSCR loan programs page.
About Lendmire
Lendmire is a non-QM mortgage brokerage (NMLS# 2371349) arranging DSCR investor loans in 41 markets, including Washington, D.C., through wholesale and investor-lending channels. DSCR loans are evaluated by the lender on rental income rather than personal income, subject to lender guidelines — a fit for LLC-owned portfolios, self-employed investors, and operators scaling beyond conventional loan caps. Recognized as a Scotsman Guide Top Mortgage Workplace in 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. CFPB: What Is a Home Equity Line of Credit (HELOC)?
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 Refinance Out of Hard Money After an Overspent Rehab? · Hard Money Loan Requirements for an LLC Borrower · Hard Money Appraisal Requirements for an Investment Property
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.