The Quick Read: Experience mostly decides how much cash a first-time flipper must bring and how the loan is structured, not whether a lender will look at the file, because lenders judge the deal first and the borrower’s ability to finish it second, though some institutional funds still require completed projects.
- Leverage is tiered by documented completed projects. On the programs Lendmire places, fix-and-flip leverage runs 85% of project cost with fewer than 2 projects, 90% at 2 or more, and 93% at 5 or more. Every tier is capped at 75% of after-repair value. This varies by lender, property, and experience.
- Credit still counts. A 620 minimum score is the floor, with added conditions below 660.
- Terms are short: 6 to 18 months, interest-only, no prepayment penalty on these programs.
- A first-timer can offset a thin résumé with a proven contractor, a partner with completed projects, more cash, or a simpler scope.
- When you exit into long-term rental financing, the new lender looks at the property, not your flip history.
What Is the Lender Really Underwriting?
A hard money lender underwrites the deal first. Hard money is short-term, asset-based credit secured by the property, as a market source’s fix-and-flip explainer describes it, and it often carries no prepayment penalty. The lender is betting on the collateral and the plan.
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.
So the first questions are about the project. What is the purchase price? What will it be worth after repairs, and do the comps support that? Is the budget realistic? How do you get repaid?
Only then does the lender ask about you. Can this person actually finish the job? Experience is one answer to that question. It is not the only one.
Here is how the pieces rank on most files across the wholesale network Lendmire works with. Lenders differ, so treat this as a pattern, not a rule.
| Factor | What the lender checks | How a first-timer helps it |
|---|---|---|
| Deal and ARV | Price, comps, margin | Buy at a real discount |
| Exit plan | Sale or refinance path | Write it down with numbers |
| Cash and reserves | Seasoned funds, liquidity | Bring more than the minimum |
| Credit | Score and history | Clean up before applying |
| Experience | Completed projects, scope | Add a team to cover the gap |
| Team | Contractor, partner, entity | Hire proven, licensed help |
Experience sits in the middle. It matters. But a strong deal with strong cash beats a thin deal with a great résumé.
(That sounds backwards to most beginners, who assume the résumé is the whole game.)
How Underwriting Treats Experience, Step by Step
The mechanics are simpler than the mystique. Here is the sequence on a typical file.
Step 1: The lender counts completed projects. It places you in a leverage tier based on that count. Definitions vary. Some lenders count rentals and some count only flips. Some ask whether you owned the property, ran the rehab, and sold it.
Step 2: The count sets your loan-to-cost. Loan-to-cost means the loan as a share of what the project costs, purchase plus rehab. On the programs Lendmire brokers, the tiers are:
| Completed projects | Max loan-to-cost | Cap |
|---|---|---|
| Fewer than 2 | 85% of project cost | 75% of ARV |
| 2 or more | 90% of project cost | 75% of ARV |
| 5 or more | 93% of project cost | 75% of ARV |
These figures vary by lender, property, and experience, and nothing here is a commitment to lend. The top tier is reserved for experienced investors.
Step 3: Two ceilings apply, and the lower one controls. The loan can’t exceed your tier’s share of cost. It also can’t exceed 75% of after-repair value, or ARV, which is what the property should be worth once the work is done. Your down payment is whatever gap those two limits leave.
Step 4: Rehab money comes in draws. On these programs, up to 100% of the rehab budget can fund in draws against completed work. That is a rehab-budget figure, never a purchase leverage figure. Draws reimburse work already done. You carry the first phase with your own cash.
Step 5: The lender reviews documentation. Experienced borrowers hand over a list of addresses, purchase and sale dates, scopes, and results. Settlement statements and project ledgers carry more weight than before-and-after photos. First-timers submit the plan instead, with a line-item scope and contractor bids.
Step 6: Cash, entity, and credit get checked. Expect an LLC with an EIN, subject to lender program eligibility. Expect seasoned bank funds and reserves. Expect a credit pull. Hard money is not a no-credit-check product. The minimum score is 620 on these programs, with additional conditions below 660, and first-time investors qualify at the lower leverage tiers.
Notice what is missing. No step says reject anyone with zero flips. The tier simply starts low.
What Counts as Experience?
Counting is where lenders disagree most. A flip you sold clearly counts at nearly every lender. After that, it gets fuzzy.
| Type of experience | Common treatment | Ask the lender |
|---|---|---|
| Flips you owned and sold | Usually counts | Any lookback window? |
| Rentals you renovated | Often counts partly | Do rehab-and-hold projects count? |
| Contractor-only work | Varies widely | Must I have owned the property? |
| Partner’s completed projects | Depends on file role | On the loan or guarantor only? |
| Wholesale deals | Rarely counts | Any credit at all? |
Labels are also inconsistent. Some lenders say their hard money loans are for veterans only, while others open them to newer investors. Neither label is a standard. Ignore the name and ask for the tier sheet.
One more wrinkle. Market data defines a flip loosely. ATTOM counts any arm’s-length resale within 12 months as a flip. That definition serves statistics. A lender’s experience count is narrower and usually asks whether you ran the project.
Same Deal, Three Borrowers
Run the numbers on one modeled deal. These inputs are assumptions, not market data. Say total project cost, purchase plus rehab, equals 70% of ARV.
- Borrower A, fewer than 2 projects: 85% of project cost. That is about 59.5% of ARV. Cash needed: 15% of project cost.
- Borrower B, 2 or more: 90% of project cost, about 63% of ARV. Cash needed: 10% of project cost.
- Borrower C, 5 or more: 93% of project cost, about 65% of ARV. Cash needed: 7% of project cost.
Here the tier controls. All three land below the 75% of ARV cap, so experience moves the cash requirement by a visible margin.
Now tighten the deal. Say project cost equals 85% of ARV, a thin margin.
- Borrower A: 85% of cost is about 72.25% of ARV. Under the cap, so the tier controls.
- Borrower B: 90% of cost would be 76.5% of ARV. The cap cuts it to 75%.
- Borrower C: 93% of cost would be 79.05% of ARV. The cap cuts it to 75% too.
Both experienced borrowers end up at about 88% of cost. The deal’s own limit controls. That is the part most beginners miss: a thin deal erases most of the advantage experience buys.
The takeaway is practical. A well-bought project lets your tier matter. A badly bought project makes you a 75%-of-ARV borrower no matter who you are.
How to Offset a Thin Track Record
If a lender tiers you low, you can strengthen the file. Lenders respond to these, though none is automatic and each varies by lender.
1. A licensed, insured contractor with a verifiable portfolio. Bids on paper and references that check out carry real weight.
2. A partner with completed projects. Whether their record counts toward your tier depends on how they sit on the loan. A partner on the loan, a guarantor, and a hired contractor are treated differently. For a closer look at that split, see Lendmire’s piece titled How Hard Money Lenders Score a First-Time Flipper With a Co-Borrower.
3. A real estate or contractor license. It shows you know the work.
4. More cash. Extra equity and reserves speak louder than a promise.
5. A simpler scope. Cosmetic rehab on a sound house is easier to underwrite than structural work. Newcomers are often not allowed to act as their own general contractor unless the rehab is light.
6. A smaller first project. It builds the record that moves you up a tier.
Many first-timers hear a catch-22: you need a track record to get a loan, and a loan to get a track record. The way out is one modest, well-documented project.
Where the General Rule Breaks
Institutional funds and securitized lenders. Some require completed projects outright. A first-timer should ask before applying, because an application and credit pull wasted on a lender with a hard gate helps no one. Local private lenders tend to be more flexible.
A deep-discount deal. A very cheap purchase can persuade a lender to take a chance on a newcomer. A big margin protects the lender’s collateral.
Credit that cuts both ways. A weak score can sometimes be offset by strong deal evidence. Some lenders view an experienced borrower with mediocre credit as lower risk than a first-timer with a strong score. That is judgment, not a formula. And on these programs the 620 floor still stands.
Contractor friends. A friend who builds houses does not automatically count as your experience. It depends on the lender and on how that person is structured on the file.
Zero-down pitches. Be skeptical. On the programs described here, purchase leverage stops at 93% of project cost even at the top tier, and the nearest thing to full funding is the rehab budget advanced through draws. If a pitch promises 100% financing on a first flip, treat it as a screening flag.
Property type. These programs cover non-owner-occupied residential property, 1 to 4 units. Ground-up construction runs to 10 units. Commercial, land, and owner-occupied properties are not on the sheet. Programs vary by lender and property, and every file is underwritten individually.
What Stalls a First File
Most first files don’t fail on experience. They stall on the basics.
- Not enough cash. The down payment is only part of it. You also need reserves and funds to carry the first rehab phase before draws arrive.
- Credit shortfalls. Below 660, added conditions apply. Below 620, programs on this network are off the table.
- A project too big for the value ceiling. If the numbers push past 75% of ARV, the lender trims the loan.
- A vague package. Lenders want to see the whole plan on paper.
A solid first-timer package includes:
- the purchase contract
- a line-item scope, ideally with contractor bids
- ARV comps
- a timeline
- proof of funds
- entity documents
- a written exit strategy
Key Terms Defined
After-repair value (ARV): what the property should be worth once the renovation is done, supported by comparable sales.
Loan-to-cost (LTC): the loan amount as a share of total project cost, purchase price plus rehab budget.
Draw: a disbursement of rehab funds after a stage of work is finished and verified.
Seasoned funds: money that has sat in your account long enough for a lender to trace its source.
Tier: the leverage bracket a lender assigns based on how many projects you’ve completed.
What the Decision Looks Like in Practice
Experience sets two numbers: how much cash you bring and how the loan is structured. Both feed your profit.
Margins are thin and cash efficiency matters. ATTOM’s latest quarterly flipping report counted 77,991 flips, or 6.2% of sales, and The Title Report’s recap shows a typical margin of 21.5%, down from 27.6% a year earlier, on typical gross profit of $60,526. That gross figure leaves out rehab, financing, taxes, insurance and transaction costs, which experienced flippers put at roughly 20% to 33% of ARV.
Tax treatment varies; consult a qualified professional.
For a first-timer, the honest play is to model the low-leverage case. Assume the 85% tier and a lower purchase price than you’d like. If the project still pays, the next one starts from a higher tier.
This one is a genuine toss-up for ambitious beginners. A bigger first project offers more profit, but a smaller one builds a cleaner record and risks less cash. The smaller path usually wins on the first loan, though some investors argue the other way.
Think about the exit too. Hard money runs 6 to 18 months, interest-only, and there are no multi-year options on the current program. Many investors who keep the property refinance out of hard money into long-term DSCR financing once it is stabilized, and Lendmire brokers that path. At that exit, experience matters far less. The lender looks at the appraised value, market rent, credit, and reserves, not your flip history. DSCR means debt service coverage ratio: rent measured against the full monthly housing payment. Lendmire’s complete DSCR loans guide explains how that test works.
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. It arranges these loans through select lenders in its wholesale network, across 41 markets, including Washington, D.C. Reach the team at 828-256-2183.
Frequently Asked Questions
Do I need prior flips to get a hard money loan?
Usually not. Most lenders fund first-timers at lower leverage with more cash required, while a few institutional funds do require completed projects. On the programs Lendmire places, fewer than 2 completed projects means the 85% of project cost tier, capped at 75% of ARV. Terms vary by lender, property, and experience.
Does my partner’s record count toward my tier?
It depends on how the partner appears on the loan. A partner on the loan, a guarantor, and a hired contractor are treated differently, and each lender sets its own rules. Ask the lender before you structure the deal, not after.
Can I act as my own contractor on a first flip?
Often not, unless the rehab is light. Lenders generally want a licensed, insured contractor on heavier scopes. A verifiable portfolio and written bids help the file.
Do rentals count as experience?
Sometimes. Some lenders count rehab-and-hold projects and some count only completed flips. Ask whether you must have owned and renovated the property, and whether a lookback window applies.
What if I’m declined?
Find out why. If it was cash, credit or scope, you can fix those and reapply or try a different lender. A smaller first project, a stronger contractor, or a partner with completed projects often changes the answer. No outcome is guaranteed, and each file is underwritten individually.
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.
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References
1. PR Newswire: ATTOM home flipping returns release
2. ATTOM: home flipping profits continue gradual decline
3. thetitlereport.com: Attom Report Showing Continuous Drop in Home Flipp
4. WRE News: home flipping returns and 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: How Hard Money Lenders Count Rehab Funds Toward Your Minimum Down · Bridge Loan vs Hard Money for a First-Time Investor: The Exit Plan · How Much Hard Money Holds Back for an Experienced Flipper’s Eviction
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.