The Quick Read: A borrower with no completed flips typically brings about 15% of project cost on the entry leverage tier, then adds closing costs, interest reserves, and the cash to start the rehab before the first draw. A thin-margin deal can raise that number, because the loan is also capped against after-repair value.
- The entry tier for fewer than 2 completed projects is 85% of project cost on a fix-and-flip, so the borrower funds the other 15%.
- Every fix-and-flip tier is also capped at 75% of after-repair value, and that cap can add to the cash you bring.
- Closing costs, interest reserves, and first-stage rehab cash sit on top of the down payment.
- A true 100% purchase program does not exist in Lendmire’s network, and the top tier is reserved for experienced investors.
- All figures vary by lender, property, and experience, and none is a commitment to lend.
Is Hard Money the Same as Cash?
No. Hard money is a loan, so it does not make you a cash buyer. Hard money loans are short-term, collateral-based private financing, sized off the property and the plan. The cash you bring is the gap between that loan and what the project costs.
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.
Some sellers treat a hard money buyer almost like a cash buyer because the loan is built around the asset. Your own money still goes in first.
Lendmire is a broker. It arranges these loans through select lenders in its wholesale network, 41 markets in all, including Washington, D.C. Every figure below reflects typical network guidelines and varies by lender, property, and experience. Nothing here is a commitment to lend.
What Are the Five Buckets of Cash a First-Timer Brings?
A first-time borrower brings five kinds of cash: the down payment, lender fees, closing costs, interest reserves, and early rehab money. Beginners often count only the first. The table shows when each is due and what it covers.
| Bucket | When it is due | What it covers |
|---|---|---|
| Down payment | At closing | Gap between loan and project cost |
| Lender fees | At closing | Origination and processing charges |
| Closing costs | At closing | Title, appraisal, inspection, documents |
| Interest reserves | Monthly during the term | Interest-only carry on the loan |
| First-stage rehab cash | Before the first draw | Early work paid up front |
The first three are paid when the deal closes. The last two are spread over the project, and they are the ones newcomers underestimate.
Hard money is not zero-down lending. The down payment is only the largest single line.
Does No Flip History Change Eligibility or Just Leverage?
Mostly leverage. Across the network, experience sorts borrowers into tiers. A first-timer is usually not shut out, but the borrower gets a lower leverage tier than a seasoned operator.
Here is how the fix-and-flip tiers run in the network. They are measured against project cost, which is the purchase price plus the rehab budget:
- Fewer than 2 completed projects: 85% of project cost.
- 2 or more completed projects: 90% of project cost.
- 5 or more completed projects: 93% of project cost.
- Every tier is capped at 75% of after-repair value.
That is why the top tier is reserved for people who have finished projects before.
Credit still matters. A 620 minimum score is typical, with additional conditions below 660. First-time investors qualify at the lower leverage tiers. Underwriting stays asset-based, so it looks at the property, the plan, and the exit.
Other structures carry different leverage:
- Bridge purchases without rehab run up to 80% of the purchase price.
- Cash-out and rate/term refinances run up to 65% of value.
- Ground-up construction runs up to 90% of cost and 75% of completed value, but that is reserved for borrowers with 3 or more completed projects.
A first-timer can do the purchase-and-rehab deals. The construction tier is out of reach until the borrower builds a record.
How Does the Value Cap Raise Your Cash?
The loan is the lower of two numbers: the cost-based loan and the value-based loan. On a thin-margin deal, the value cap wins and your cash goes up. On a deep-margin deal, the cost tier wins and your cash stays at the headline figure. The loan-to-value ratio is simply the loan divided by the asset’s value, which is why the value cap behaves this way.
Here is the arithmetic, using modeled assumptions rather than market data. Express everything as a share of after-repair value, which is the expected value once the work is done.
Deep-margin deal (modeled). Project cost is 70% of after-repair value.
- The 85% cost tier gives a loan of 59.5% of after-repair value.
- That sits well under the 75% cap, so the cost tier governs.
- Cash from the borrower is 15% of project cost.
Thin-margin deal (modeled). Project cost is 92% of after-repair value.
- The 85% cost tier would give a loan of 78.2% of after-repair value.
- That is above the 75% cap, so the cap governs and the loan is 75% of value.
- Borrower cash is 17% of value, which is about 18.5% of project cost.
With the same borrower and the same tier, cash is about 3.5 percentage points higher on the thin deal. The thinner the spread between cost and value, the more the cap takes over.
The network figure is 75% of after-repair value, and it applies on top of the cost tier. Lenders differ, so confirm which basis a quote uses.
This is why deal selection matters more than the tier itself. A first-timer who buys with real margin brings less cash than one who buys at a thin spread.
When Is Each Dollar Spent?
Cash goes out in three waves: closing, the stretch before the first draw, and the carry months. Closing is the visible wave. The other two are where first projects run short.
1. At closing. You pay the down payment, lender fees, and closing costs. The lender may also hold the rehab funds in escrow.
2. Before the first draw. Rehab money is released in draws against completed work, so draws reimburse you in arrears. You front the early work, then request a draw once the work is done and inspected. Up to 100% of the rehab budget can fund through draws, but always inside the cost tier and the value cap.
3. During the term. These loans are interest-only and short, typically 6 to 18 months, with no prepayment penalty. You carry the interest every month, and a delayed rehab means more months of carry.
Lendmire’s piece How Much Cash a Cosmetic Flip Needs Between Hard Money Draws goes deeper on the middle wave.
Plan reserves for the full term, not the scheduled finish. A project that runs long costs more in carry, and that comes out of your pocket.
How Do Lenders Verify the Cash You Bring?
Lenders confirm that the cash exists and that it is yours. Expect to document the funds with bank statements and a personal financial statement. A scope of work, a budget, and entity documents are common requests if you buy through an LLC, subject to program terms.
Across the network, a few patterns recur:
- Funds should be visible in your accounts, not borrowed for the deal.
- A personal guarantee and a credit pull are normal.
- Experience credit requires documented purchase and sale records, so a first-timer has none to submit.
- Larger or out-of-state rehabs by newcomers draw extra scrutiny.
For a new borrower, the proof-of-funds package is part of the application. Gather it before you submit a deal.
How Can a First-Timer Bring Less Cash?
There are real levers, and each has a limit. None of them removes the leverage tier, the credit floor, or the value cap.
- Buy with more margin. A deeper discount to after-repair value keeps the cost tier in control and keeps your cash at the headline figure.
- Keep the scope tight. A smaller rehab means less to front before the first draw and fewer months of carry.
- Choose a smaller first deal. Lower cost means a smaller down payment, and it builds the record that moves you to the 90% tier on the next project.
- Add an experienced partner. A partner with completed projects may change how a lender views the file. Treatment varies by lender, so ask before you assume it.
- Use construction skill. A contractor background can reassure a lender, but it is a supporting factor and not a replacement for the tier.
Be wary of anything that promises less cash by shifting risk. A gap loan or junior lien on top of the first loan is not allowed by many first-lien lenders. Ask before you plan around it.
What Happens If the Cash Runs Short?
The project stalls, and carry costs keep running. A lender does not release a draw for work that has not been done, so a borrower who runs out of money before the first draw has no easy fix.
The usual causes are:
- A budget that missed hidden repairs.
- A rehab that took longer than planned, which extends the carry.
- A value estimate that fell, which can trigger the value cap on a later review.
The practical defenses are a contingency in the budget, interest reserves that cover the full term, and a conservative value estimate. Some borrowers also line up a longer-term exit early, because the loan term is short.
Many investors refinance out of hard money into long-term DSCR financing once the property is stabilized, and Lendmire brokers that path. Whether the property qualifies at that point depends on rent coverage of the monthly obligation and on lender guidelines. Lendmire’s complete DSCR loans guide explains how that long-term loan is evaluated.
What Are the Zero-Down Myths?
Offers that sound like zero down usually rely on a deep discount or extra collateral. The structure still sits under a value cap, and the borrower still pays costs. In Lendmire’s network, there is no true 100% purchase program.
The common myths and the verdicts:
- “Hard money ignores the borrower.” Credit, liquidity, experience, and a personal guarantee all matter.
- “First-timers are shut out.” Most lenders lower leverage instead of declining.
- “The down payment is the whole cash need.” Fees, closing costs, reserves, and early rehab cash come on top.
- “Everyone gets the same percentage.” Quotes differ, and many use purchase price rather than after-repair value as the base.
- “100% financing is typical.” It is a specialty exception, and the value cap still applies.
The most useful question to ask any lender is which basis the percentage uses: purchase price, project cost, or after-repair value.
Hard money loans are designed for non-owner-occupied investment properties. Because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage.
Key Terms Defined
Loan-to-cost (LTC): The loan as a share of purchase price plus rehab budget.
After-repair value (ARV): The expected value of the property once the work is finished.
Draw: A release of rehab funds after completed work is inspected, paid in arrears.
Interest reserve: Cash set aside to cover interest-only payments through the term.
Completed project: A documented purchase and sale that counts toward your experience tier.
Value cap: The ceiling on the loan as a share of after-repair value, 75% across the network’s fix-and-flip tiers.
Frequently Asked Questions
Can I get a hard money loan with no flip experience at all?
Often yes, at the lowest leverage tier. In the network, fewer than 2 completed projects means up to 85% of project cost on a fix-and-flip, capped at 75% of after-repair value. Credit still matters, with a 620 minimum score and additional conditions below 660. Approval depends on the property, the plan, and lender guidelines.
How much is the down payment on a first flip?
About 15% of project cost at the entry tier, before the value cap is applied. If the cap governs, the cash is higher. Closing costs, lender fees, reserves, and early rehab money are separate. All figures vary by lender, property, and experience.
Does the rehab budget get fully funded?
Up to 100% of the rehab budget can fund through draws, but only against completed work and always inside the cost tier and value cap. You front the early work and are reimbursed after inspection. That timing gap is why early cash matters.
Can I buy with no money down?
Not through a true 100% purchase program in this network. Bridge purchases without rehab run up to 80% of the purchase price. Offers that seem to require nothing down usually rely on extra collateral or a deep discount.
How long can I hold the loan?
Terms run 6 to 18 months, interest-only, with no prepayment penalty. There are no multi-year options on the current program. Investors who need longer runway typically refinance into long-term rental financing once the property is stabilized.
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. You can also try the illustrative calculator on the site for a rough sense of the cash involved.
About Lendmire
A DSCR-focused mortgage broker, Lendmire (NMLS# 2371349) places investor financing across 41 markets — 40 states plus Washington, D.C. — with DSCR eligibility generally reviewed by the lender on property cash flow instead of traditional personal-income documentation, subject to lender guidelines. Scotsman Guide named Lendmire a 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. Corporate Finance Institute: Hard Money Loan
2. Corporate Finance Institute: Loan to Value Ratio
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 a Hard Money Lender Sizes the Maximum Term for a Flip · How to Budget Down Payment and Rehab Cash on a Hard Money Flip · How to Meet Hard Money Requirements on Your First Fix-and-Flip
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.