The Quick Read: Yes, usually. Most private lenders underwrite the property, the rehab plan, and the exit rather than your résumé, so a first flip is fundable on most files. Experience mostly changes how much you can borrow and what it costs, and a few lenders still want a track record.
- Leverage is tiered by completed projects. Fewer than 2 projects sits at the lowest tier.
- Every tier is capped by after-repair value, so cash needs run higher than the headline down payment suggests.
- Credit still matters. A 620 minimum score applies, with added conditions below 660.
- Hard money is business-purpose only. No primary residences.
- Many investors exit into long-term DSCR financing if they hold the property.
Everything below is how the brokerage sees these files across a wholesale network. Program figures vary by lender, property, and experience, and nothing here is a commitment to lend.
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.
How Do Lenders Actually Think About a First Flip?
Hard money lenders weigh three things: the property, your ability to execute, and the exit. The property comes first. The loan is secured by real estate. That is why Corporate Finance Institute describes hard money as collateral-based lending from private or non-bank lenders on short terms.
A missing track record is not an automatic no. The lender asks whether the purchase price is sound, whether the after-repair value is supported by comps, whether the budget is realistic, and how you get repaid.
Your capacity still gets reviewed. A first-timer shows it through cash on hand, a clear scope of work, and a contractor who has done this before. Adjacent experience helps: a contractor’s license, a real estate license, or renovating your own rentals. Mention all of it.
What Changes for a First-Timer?
Experience shifts leverage first, pricing second, and scrutiny third. Eligibility is usually the last thing it touches.
| Factor | First-timer | Experienced investor |
|---|---|---|
| Leverage | Lowest tier | Higher tiers |
| Cash needed | More | Less |
| Self-managed rehab | Often restricted | Often allowed |
| Scrutiny | Heavier on budget and contractor | Lighter |
| Eligibility | Usually open | Open |
On the network’s tiered structure, fix-and-flip leverage typically runs 85% of project cost with fewer than 2 completed projects, 90% of project cost at 2 or more, and 93% of project cost at 5 or more. Every tier is capped at 75% of after-repair value. These figures vary by lender, property, and experience.
Not every lender is built the same. Some larger institutional funds require prior completed projects. Local private lenders often fund first-timers at tighter terms. Ask for fixed terms in writing, not ranges.
Where Does the Cash Actually Go?
Cash needs are bigger than the down payment. The loan is sized against both cost and ARV, whichever binds first, and rehab money does not arrive at closing.
Here is the full list a first-timer should budget:
- The gap between loan-to-cost and total project cost at purchase
- Closing costs and lender fees
- Reserves the lender wants to see
- The contractor’s up-front deposit
- Carry while the work is underway: interest, insurance, utilities, and taxes
- A contingency cushion for overruns
ARV is the after-repair value, the price the finished property should support. Loan-to-cost is the loan as a share of purchase price plus rehab budget. A draw is a release of rehab money after work is completed and inspected.
Up to 100% of the rehab budget can fund in draws against completed work. That is a rehab-budget figure, not a purchase LTV. The borrower fronts labor and materials first, then gets reimbursed. Cash gets tight between draws, and that is where first-timers run short.
There is no true 100% purchase program. Lenders want you to have something to lose. Ads that suggest otherwise are a red flag.
What Does a Lender Want to See?
A clean package is the best substitute for a track record. Lenders ask for:
- The purchase contract
- A scope of work and line-item rehab budget, ideally backed by contractor bids
- ARV comparables
- A rehab timeline
- Proof of funds for the down payment and reserves
- Entity documents if you are buying through an LLC, subject to lender program eligibility
- A written exit strategy
Credit is reviewed too. The network’s hard money program starts at a 620 minimum score, with additional conditions below 660. “Property over credit” is a fair summary of how the file is built, not a promise that credit is ignored.
Pre-qualify before you find a deal. Investors who start the conversation after a contract is signed often lose the deal to someone who already did the homework.
Business Purpose Only
Hard money is for investment property, not a home you will live in. Loans on non-owner-occupied 1-4 unit residential property qualify, and ground-up construction goes to 10 units. Commercial, land, and owner-occupied property are not offered. Credit used to acquire or improve rental property counts as business purpose under the Truth in Lending Act, which is why these loans sit outside consumer mortgage rules.
Can You Act as Your Own Contractor?
Often not on a first deal. Lenders who accept newcomers frequently will not let you serve as general contractor unless the rehab is very light. Hiring an experienced, licensed contractor is the usual fix.
Partnering with an experienced investor is another common workaround. A partner’s completed projects can lift the file into a better tier. A larger down payment helps too.
Pick a Beginner-Friendly First Project
The best first flip is boring. Keep the rehab light relative to the purchase price. Favor cosmetic work over structural work. Avoid heavy permitting. Build ARV from conservative, recent, nearby comps.
Run the numbers on a delay, not just the success case. Take a flip that runs a few months over. Interest-only carry keeps accruing, the contingency shrinks, and the exit gets later. Loan terms run 6 to 18 months, interest-only, with no prepayment penalty on this program. There are no multi-year options, so a project that outruns its term needs a plan, not hope. Build that contingency before closing, not after.
What Fails the Exit?
Two things sink exits: an ARV that appraises low and a hold plan whose rent does not cover the long-term loan. Both are avoidable if you underwrite the exit before you buy.
If you sell, you never need a DSCR loan. If you hold the property as a rental, the short-term loan is a bridge. That is the BRRRR approach: buy, rehab, rent, refinance. The difference from a flip is the exit. A flip sells, while BRRRR rents and holds.
Many investors refinance out of hard money into long-term DSCR financing once the property is stabilized, and Lendmire brokers that path. DSCR compares rent to the full monthly obligation: principal, interest, taxes, insurance, and any HOA dues. It does not measure repairs, vacancy, management, or capex, so clearing 1.00 is not the same as positive cash flow.
On the DSCR side, 1.00 is where select programs start. Coverage below 1.00 is available through select lenders in the network, with leverage and terms adjusted. Most rental purchases land at 75% to 80% LTV, and cash-out on a standard rental tops out around 75% LTV with about 6 months of seasoning commonly expected. Credit of roughly 660 is typical, and 700 or higher opens the strongest tiers. Reserves vary by lender, leverage, and loan size. DSCR files are not built for properties that still need major rehab, so the refinance happens after the work is done and the property is rentable.
For the full picture, see the complete DSCR loans guide. If a hold exit is your plan, run the post-rehab rent against it before you close the bridge loan. Some DSCR lenders impose a seasoning wait, so confirm that early.
Gap Funding and No-Money-Down Claims
Older content promotes second liens and zero-down routes. For first-timers, those are rare. Loan-to-cost caps leave a real cash requirement even at the top tier, and lenders want skin in the game. Treat any pitch that skips your cash contribution as a screening flag.
Application Path, Step by Step
1. Talk to lenders before you have a deal. Ask about leverage tiers for a borrower with your experience.
2. Assemble proof of funds. Down payment, reserves, and a contractor deposit.
3. Build the deal package. Contract, scope of work, bids, ARV comps, timeline, exit.
4. Choose the entity. If you buy through an LLC, form it before the contract so documents match, subject to lender program eligibility.
5. Underwrite the exit. Run both sale and DSCR-refinance numbers.
6. Manage draws. Keep inspection requests and contractor invoices organized.
If You Are Declined or Not Ready
Do not re-apply unchanged. Lower the rehab scope, add cash, bring in an experienced partner, or hire a stronger contractor. A smaller first project builds the record that moves you up a tier. Hard money is the wrong tool when the property cannot support its ARV or when you cannot carry the project through a delay.
Frequently Asked Questions
Do I need experience to get a hard money loan?
Not universally. Many lenders fund first-timers, usually at lower leverage and with more cash required. A few lenders and institutional funds do require completed projects, so ask before you apply.
How much cash does a first-time flipper need?
More than the down payment. Budget for the gap under the loan-to-cost cap, closing costs, reserves, the contractor deposit, carry, and a contingency. The loan is capped at 75% of ARV on every tier, which can raise the cash needed on thin-margin deals.
Does credit matter?
Yes. The underwriting is asset-based, but a 620 minimum score applies on this program, with additional conditions below 660. Varies by lender, property, and experience.
What is the biggest risk?
The short term. Loans run 6 to 18 months, interest-only. A delay or low appraisal can leave you short on time and cash, so plan a backup exit before closing.
Can I refinance a flip into a rental loan?
Often, yes. Many investors refinance into long-term DSCR financing once the property is stabilized, subject to lender guidelines, seasoning, and the rent supporting the coverage ratio.
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.
Tax treatment varies; consult a qualified professional.
About Lendmire
As a non-QM mortgage broker (NMLS# 2371349), Lendmire facilitates DSCR investor loans across 41 markets, including Washington, D.C. DSCR eligibility is generally reviewed around property-level rental income instead of personal income documentation, subject to lender guidelines, serving LLC-structured portfolios and self-employed borrowers who don’t fit conventional boxes. A two-time Scotsman Guide Top Mortgage Workplace (2025, 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. Corporate Finance Institute: Hard Money Loan
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 Buy a Rental With a Hard Money Acquisition Loan? · Can You Buy a House Through an LLC With a Hard Money Loan? · Should a First Rental Use Hard Money Bridge or a Profit and Loss Loan?
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.