The Quick Read: On most files placed through Lendmire’s wholesale network, the cash down on an out-of-state bridge loan runs about 7% to 15% of project cost on a fix-and-flip, depending on how many projects you have completed, and about 20% of the purchase price on a bridge purchase with no rehab, varying by lender, property, and experience.
- Distance has no tier of its own. Being out of state rarely adds a separate down-payment line. It shows up in lender footprint, value checks, entity registration, and reserves.
- Experience sets the leverage. Flip leverage runs 85% of project cost with fewer than 2 completed projects, 90% at 2 or more, and 93% at 5 or more. Every tier is capped at 75% of after-repair value.
- Bridge purchases without rehab go up to 80% of the purchase price.
- The down payment is not your total cash. Closing costs, interest carry, reserves, and rehab overruns sit on top of it.
- There is no true 100% purchase program. Zero-down claims usually describe something narrower.
How Lenders Size Your Down Payment
Your down payment is whatever the lender will not fund. The lender picks a leverage limit, applies it to cost or value, and you cover the difference. Several limits can apply at once, and the lowest result controls.
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.
Three terms drive this math. Loan-to-value (LTV) divides the loan by what the property is worth, and Corporate Finance Institute explains how lenders use that ratio to set borrowing limits. Loan-to-cost (LTC) divides the loan by what the project costs. On an acquisition, the purchase price is the cost base. After-repair value (ARV) is the estimated worth of the property once the work is done.
Hard money leans on cost and ARV because the loan is secured by the property, not by your paycheck. That is why the cap that binds is often ARV, not the cost tier.
What the Tiers Look Like in Practice
Across the network, hard money leverage is tiered by documented completed projects. The top tier is reserved for experienced investors. Every figure below varies by lender, property, and experience, and nothing here is a commitment to lend.
| Deal type | Leverage | Cash you bring (roughly) |
|---|---|---|
| Flip, under 2 projects | 85% of project cost, capped at 75% of ARV | 15% of cost or more |
| Flip, 2+ projects | 90% of project cost, capped at 75% of ARV | 10% of cost or more |
| Flip, 5+ projects | 93% of project cost, capped at 75% of ARV | 7% of cost or more |
| Bridge purchase, no rehab | Up to 80% of purchase price | About 20% |
| Cash-out or rate/term refinance | Up to 65% of value | Equity, not a down payment |
| Ground-up, 3+ projects | Up to 90% of cost, 75% of completed value | 10% of cost or more |
Notice “or more” in the flip rows. When the ARV cap binds, your cash goes up. Up to 100% of the rehab budget funds in draws against completed work, but that is a rehab-budget figure. It is never a purchase LTV.
Credit matters too. A 620 score is the minimum, with extra conditions below 660. First-time investors qualify at the lower leverage tiers. Loan amounts run up to $5,000,000, larger by exception, and terms run 6 to 18 months, interest-only, with no prepayment penalty. Collateral is non-owner-occupied residential property of 1 to 4 units.
Does Being Out of State Change the Number?
Not directly. The leverage tiers above apply the same way whether you live next door or across the country. Experience, credit, the deal, and the exit set the percentage. Where you live is not a column on that sheet.
Distance still matters, just through other doors:
- Lender footprint. A lender can only fund in states where it operates. Lendmire’s hard money programs cover 41 markets, including Washington, D.C., but not every state, so check coverage before you fall in love with a deal.
- Value verification. The lender orders its own appraisal or broker opinion of value. You cannot walk the block, so you are leaning on that number. A lower value raises your cash.
- Draw management. Rehab money releases in draws against completed work, and remote inspections can add friction. Lendmire’s piece How to Vet a Hard Money Lender’s Draw Process From Out of State covers what to ask.
- Entity registration. An LLC formed in one state often needs to register as a foreign entity in the property’s state, a step commonly called foreign qualification. Requirements differ by state, so confirm the details with counsel.
Some lenders in the network may ask for more reserves or a stronger experience profile on remote files. That is a file-level judgment, not a published rule.
Step by Step: How Underwriting Sizes Your Cash
Here is how a file moves from deal to cash due.
1. Pick the basis. A purchase-only bridge sizes off purchase price. A rehab deal sizes off project cost, which is purchase price plus rehab.
2. Apply your tier. Your completed-project count sets the percentage of cost.
3. Check the ARV cap. The loan cannot exceed 75% of the lender’s after-repair value.
4. Take the lower number. Whichever limit gives the smaller loan controls.
5. Compute the gap. Cost minus loan is your cash into the deal.
6. Add the extras. Closing costs, prepaid interest, and reserves come on top.
7. Document it. Expect the purchase contract, scope and budget, entity documents, proof of funds, and ID.
Hard money is a business-purpose product. These loans are for non-owner-occupied investment property, so they are reviewed differently from a standard owner-occupied mortgage.
A Worked Example in Percentages
These inputs are modeled assumptions, not market data. Say a flip has a project cost equal to 70% of ARV, and you have fewer than 2 completed projects.
The 85% cost tier funds 59.5% of ARV. That sits well under the 75% ARV cap, so the cost tier controls. You bring 15% of project cost.
Now tighten the spread. Say the project cost equals 90% of ARV. The same 85% tier would fund 76.5% of ARV, which breaks the cap. The loan drops to 75% of ARV, and your cash climbs to about 16.7% of project cost.
Same investor, same tier, higher cash. The deal spread did that, not your zip code.
Now picture the out-of-state version. The lender’s appraised ARV comes in lower than your estimate, say 5% lower. Every ARV-based cap shrinks with it. That is the practical way distance costs you money: valuation risk, not a surcharge.
Cash Beyond the Down Payment
Plan for more than the down payment. A typical out-of-state file asks for cash in these places:
- Earnest money and closing costs.
- Prepaid interest, since the loan is interest-only.
- Reserves. A common expectation is proof of liquidity beyond the down payment.
- Rehab overruns. The loan covers the scope agreed at closing, so surprises come out of your pocket.
- Remote costs: inspections, a local agent, a property manager, and travel.
Tax treatment varies; consult a qualified professional.
Keep a cash buffer for draws. Draw money reimburses completed work, so you often fund a stage first and get repaid after. When you cannot check the site yourself, that float matters more.
Where the Rule Breaks
The tiers are a map, not a law. These edge cases move the number.
First-time borrowers. With fewer than 2 completed projects, you sit in the 85% cost tier. Credit below 660 adds conditions on top. Lenders also look at liquidity and your plan, so a thin file can mean less leverage.
Purchase-only bridge. No rehab budget means no extra financed dollars to lean on. The down payment becomes your main equity cushion, around 20% on most files, because leverage tops out at 80% of the purchase price.
Refinance bridge. A refinance is sized to value and equity. Cash-out and rate/term refinances go up to 65% of value, so there is no down payment to compute.
A “bargain” price. Buying cheap does not shrink your cash. The lender sizes from its own value and cost figures, not from your estimate of the discount.
Large loans. Balances run up to $5,000,000, with larger by exception. Smaller balances vary by lender.
Construction. Ground-up projects go up to 10 units, and the top leverage requires 3 or more completed projects.
Zero-Down Claims
There is no true 100% purchase program. When a lender advertises 100% financing, it usually means the rehab budget is fully funded, or that equity in another property covers the gap. The purchase still carries a cost tier and an ARV cap.
Nav’s explainer on 100% hard money financing makes a similar point: lenders still review credit, liquidity, experience, entity structure, and reserves. Underwriting stays asset-based, meaning property, plan, and exit, but nothing is waived.
Watch for headline percentages that quietly mean something else. A rehab figure is not a purchase LTV. A cost-based figure must say “of project cost.” Ask the lender which number the percentage divides.
Plan the Exit Before You Size the Down Payment
A bridge loan repays from an event: a sale or a refinance. Many investors refinance out of hard money into long-term DSCR investor loans once the property is stabilized, and Lendmire brokers that path. Think of it as two underwriting events. The bridge is sized on cost and ARV. The takeout is sized on rent and value.
The takeout has its own limits. Cash-out refinances on rentals across the network tend to top out around 75% of value, with about 6 months of seasoning as the common expectation. A thin down payment on the bridge can leave a gap if the appraisal at takeout lands short.
The DSCR measures rent against the full monthly payment, nothing else. A ratio of 1.00 is where many select programs start, and a separate select-lender path goes below 1.00 with leverage and terms adjusted. Clearing 1.00 does not equal positive cash flow, because repairs, vacancy, management, and capex sit outside the calculation. A larger down payment on the takeout lowers the payment and can lift the ratio, but it does not erase credit floors or leverage caps. Lendmire’s complete DSCR loans guide covers that side in full.
Key Terms Defined
Loan-to-cost (LTC): the loan divided by total project cost, meaning purchase price plus rehab.
After-repair value (ARV): the estimated value of the property once renovation is finished.
Loan-to-value (LTV): the loan divided by the property’s current value.
Draw: a release of rehab funds after a stage of work is completed and inspected.
Foreign entity registration: the filing an LLC makes to operate in a state other than where it was formed.
Seasoning: the waiting period a lender wants between two events, such as buying a property and refinancing it.
What the Decision Looks Like
Run four checks before you commit to an out-of-state deal.
1. Which cap binds? Compute the cost tier and the 75% ARV cap, then take the lower.
2. Can you cover the full cash stack? Down payment, closing costs, interest carry, reserves, overruns, and a draw float.
3. Does the takeout work? Test the bridge balance against a conservative refinance value.
4. Who is on the ground? Line up a local agent, contractor, and inspector before closing.
If the cash is short, the realistic levers are a stronger spread, a cheaper deal, a partner, or a track record built on smaller projects. Do not hunt for a lender that ignores the numbers.
Frequently Asked Questions
Do hard money lenders charge more down to out-of-state investors?
There is no separate out-of-state tier in the leverage sheet. Your experience, credit, deal spread, and exit set the percentage. Distance shows up in value verification, remote draw handling, and entity registration. Individual lenders may apply their own overlays, and terms vary by lender, property, and experience.
Can I get a bridge loan with 100% of the purchase financed?
There is no true 100% purchase program. Up to 100% of the rehab budget can fund in draws against completed work, but the purchase itself sits under a cost tier and the 75% ARV cap. Terms like zero down usually describe a narrower structure.
How much down do I need on a bridge purchase with no rehab?
Leverage goes up to 80% of the purchase price, so about 20% down on most files. Closing costs, prepaid interest, and reserves come in addition. Final terms depend on the lender, the property, and your experience.
What credit score do I need?
A 620 minimum applies, with additional conditions below 660. Underwriting stays asset-based, looking at the property, the plan, and the exit.
Do I need an LLC to buy out of state?
Many lenders want the loan made to an entity, subject to lender program requirements. If your LLC was formed elsewhere, it may need foreign registration in the property’s state. Confirm the specifics with counsel.
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.
About Lendmire
Lendmire — NMLS# 2371349 — is a DSCR and non-QM mortgage brokerage with investor loan programs in 41 markets, including Washington, D.C. DSCR eligibility is commonly reviewed by the lender around property-level rent rather than personal income documentation, subject to lender guidelines, and the brokerage helps arrange financing for LLC-owned portfolios beyond conventional financed-property limits. Recognized by Scotsman Guide as a Top Mortgage Workplace in 2025 and 2026.
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References
1. Corporate Finance Institute
2. Nav: Hard Money Loans and 100% Financing
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 Much a DSCR Lender Lends on a Rehabber’s Hard Money Payoff · How a Hard Money Lender Sets the Down Payment on a Condo Bridge Loan · How a Hard Money Lender Uses the Appraisal to Size a Loan
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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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.