The Quick Read: No single percentage applies, because the loan on a ten-unit with vacancies is the lowest result of several ceilings: leverage against as-is value, leverage against total project cost or after-repair value, and whether the exit can be underwritten, and vacancy pulls the as-is value and the leverage down at the same time. Lendmire is a broker, and its hard money sheet covers 1-4 unit residential properties plus ground-up construction up to 10 units. An existing ten-unit apartment building is not offered through that program.
- The loan is the lowest of several tests, never one headline percentage.
- Vacancy lowers the as-is value first, then lowers the leverage a lender applies to that value.
- The gap comes out of your cash, along with any interest reserve and rehab holdback.
- The loan is temporary, so the exit plan has to be believable on day one.
What “How Much” Actually Means
The loan amount on a hard money deal is the smallest number that survives every test. Hard money is short-term, interest-only financing sized mainly on the property and your plan for it, not on your personal income. That is why one lender’s headline percentage tells you so little about your building.
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 tests do most of the work:
- Loan-to-value (as-is): the loan as a share of what the building is worth today, with the empty units and all.
- Loan-to-cost: the loan as a share of the purchase price plus the renovation budget.
- Loan-to-after-repair-value (ARV): the loan as a share of what the building should be worth once the work is done.
On top of those sits the exit test. The lender asks how the loan gets repaid, through a sale or a refinance into permanent financing. A building that cannot plausibly reach that exit gets a smaller loan, or none.
Which test controls depends on the deal. A building that is simply under-leased is usually sized on as-is value. A building with units that are down needs a rehab budget, so cost and ARV enter the picture.
How Lenders Treat the Vacancy
Vacancy hits the loan twice. It lowers the appraised value, and it lowers the leverage the lender applies to that lower value.
Start with the size of the building. Ten units puts the file on the commercial side. One appraisal firm explains that properties of five units and up are appraised with the income approach moving to the front, while 1-4 unit properties lean on sales comparisons. The appraiser typically asks for a current rent roll, copies of leases, and a vacancy history.
The income approach builds value in a straight line. Potential gross income, less vacancy and collection loss, less operating expenses, gives net operating income (NOI). Divide NOI by a market cap rate and you have the value, as Startdeck’s commercial appraisal guide lays out. Less income in place means less NOI, and less NOI means a lower number.
The appraiser usually reports two values. The stabilized value assumes the building reaches market occupancy, which that guide puts at roughly 90-95% in its example. To get the as-is value, the appraiser deducts the cost and time of getting there. Hard money sizes against the as-is number unless the loan includes a rehab or lease-up piece.
Even a full building gets a vacancy haircut. LegalClarity’s income-approach explainer puts normal stabilized vacancy at roughly 5-7%, plus 1-2% for credit loss. Your half-empty building starts from a deeper hole than that.
For contrast, an agency approach to multifamily appraisal models the existing rent roll plus vacant units at market rent, not 100% market rents. That tells you how appraisers think about empty units: they get credit at market rent, not a free pass.
Vacant because of condition versus vacant because of leasing
Lenders separate two kinds of empty unit. Renovated but unleased units are a lease-up story, and the lender is judging your marketing plan and the local rent comps. Units that are down need a budget and a draw schedule, and the lender is judging your scope and your contractor.
A third case is occupied units paying below-market rent. They are not vacancy, but they cap the in-place income. Whether they help or hurt depends on how many units are involved and how soon you can reset the rents.
What Lendmire’s Network Does and Doesn’t Offer Here
Here is the plain scope. The hard money program Lendmire brokers covers non-owner-occupied residential property of 1-4 units, and ground-up construction up to 10 units. Existing commercial-size buildings, such as a standing ten-unit apartment property, are not offered. Program figures below vary by lender, property, and experience, and nothing here is a commitment to lend.
Within that scope, the leverage tiers are tied to your track record:
- Fix-and-flip: 93% of project cost at 5+ completed projects, 90% of project cost at 2+, and 85% of project cost with fewer than 2. Every tier is capped at 75% of after-repair value.
- Bridge purchase without rehab: up to 80% of purchase price.
- Cash-out or rate-and-term refinance: up to 65% of value.
- Ground-up construction: up to 90% of cost and 75% of completed value at 3+ completed projects.
- Rehab budget: up to 100% of the budget funds in draws against completed work. That is a rehab figure, never a purchase loan-to-value.
Loans run up to $5,000,000, with larger amounts by exception. Terms are 6-18 months, interest-only, with no prepayment penalty. The minimum credit score is 620, with additional conditions below 660, and first-time investors qualify at the lower leverage tiers.
Now compare that with the wider market. One broker-platform guide describes multifamily bridge-to-permanent loans at roughly 65-80% loan-to-value, and it lists occupancy below 90% as a common trigger for bridge financing in the first place. Lendmire’s network figures are the ones above, and they apply to 1-4 unit collateral, not to a standing ten-unit.
So what do you do with a ten-unit? Some investors turn to commercial bridge lenders. Some look at community banks, which often finance 5+ units but want meaningful down payments and a seasoned operating history. Others split the plan into smaller properties. The sizing logic below applies to any of those lenders, and it shows you what to expect before you call.
Sizing It Step by Step
A hard money loan is the lower of several ceilings, so you calculate each one and take the smallest. Here is the sequence.
1. Find the as-is value. Take the appraiser’s value with the current vacancy built in.
2. Apply the lender’s as-is leverage. The percentage steps down as occupancy falls.
3. Total the project cost. Add purchase price and rehab budget, then apply the cost tier.
4. Find the ARV ceiling. Take the after-repair value times the lender’s ARV cap.
5. Subtract interest reserve and holdbacks. Money escrowed for carry or released in draws is real money counted against the maximum.
6. Take the lowest result. Then check that the exit supports it.
Run it on a modeled four-unit rehab, which is the kind of file the network handles. Assume purchase plus rehab costs equal 90% of the after-repair value. At the 90% project-cost tier, the cost test gives 81% of ARV. The 75% ARV cap is lower, so it controls. At the 93% tier, the cost test gives about 84% of ARV, and the same 75% cap still controls.
This shows why the top tier is not a free pass. The ARV cap often binds first, and you fund the difference. These are modeled assumptions, not market data.
A vacant, un-renovated building adds one more twist. The lender sizes against what the building is worth today, not what you hope it becomes. Your down payment makes up the difference between the purchase price and the loan.
One Ten-Unit, Three Occupancy Levels
This table is an illustrative pattern, not a quote. It shows how the same building moves as occupancy changes. The direction is consistent across lenders, while the exact percentages vary by lender, property, and experience.
| Occupancy | As-is value | Leverage applied | Your cash need |
|---|---|---|---|
| Mostly leased | Close to stabilized | Highest available | Lowest |
| Partly leased | Meaningfully discounted | Stepped down | Higher, plus reserve |
| Mostly empty | Deeply discounted | Lowest, private capital | Highest, plus reserve and holdback |
Notice that the cash need rises from both directions. The value falls, so the loan shrinks. The reserve and holdbacks then take a slice of what is left.
The Carry (What Empty Units Cost You Each Month)
Carry is the cost of owning the building while it earns less than it costs. It includes the interest-only payment, taxes, utilities, and any management. On an under-leased ten-unit, the rent roll often does not cover it.
That is why lenders usually escrow an interest reserve out of the loan proceeds. The reserve is sized to bridge the lease-up period, and it counts against your maximum loan. Each month of delayed leasing drains it, and an extension is usually conditioned on an occupancy test.
One quiet risk is worth a phone call. Ask your insurer how it treats vacant units, because some policies restrict coverage on vacant space. Budget for taxes and insurance, which vary by county and carrier.
Many investors underestimate carry in one specific way. They budget interest for the planned lease-up and forget that stalled turns, a slow unit, or a permit delay stretch the timeline. The stronger files carry a cushion beyond the base-case schedule.
Why Ten Units Sits on the Commercial Side
Five units and above is where the lender stops underwriting you and starts underwriting the building. In 1-4 unit lending, the file leans on the borrower. At 5+, it leans on the property’s own numbers.
Expect different documents. Typical requests include:
- A current rent roll and copies of leases.
- Trailing-12 operating statements.
- A vacancy history.
- A market-rent schedule and rent comps.
- A scope and budget for any renovation.
Government-backed owner-occupant products, including FHA rehab loans, stop at four units. Above that, the options are commercial, private, or hard money.
Exit Plan: Where the Loan Goes Next
Hard money is a bridge. It carries you from today’s building to a stabilized one, and then a permanent loan takes it out. The lender wants to see that path before it funds anything.
The common exit is a refinance once occupancy and rent history support it. Many investors refinance out of hard money into long-term DSCR financing once a property is stabilized, and Lendmire brokers that path. A DSCR loan qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Whether a particular ten-unit fits a DSCR program depends on the property type, the program, and current lender guidelines.
Two cautions apply. First, a DSCR near 1.00 measures only rent against the monthly housing payment, which is principal, interest, taxes, insurance, and any HOA dues. It does not equal positive cash flow, because repairs, vacancy, management, and capex sit outside the calculation. Second, coverage below 1.00 is available through select lenders in the network, with leverage and terms adjusted.
For the payoff arithmetic, there is a separate piece How Much a BRRRR Cash-Out Refinance Returns After Hard Money Payoff.
If the lease-up stalls
The failure branch is predictable. You ask for an extension, and the lender checks occupancy and your reserve. You may need to pay down principal, or refinance into a lower-leverage loan.
If you finish the term with the building under-leased, the takeout lender may decline to size on a thin rent roll. That is why the best protection is a realistic schedule and extra reserve. Credit and liquidity matter too, and both are reviewed on every file.
Hard Money, DSCR, or a Bank for This Building?
The right product depends on where the building is in its life. This table sums up the structural differences.
| Factor | Hard money | DSCR loan | Bank |
|---|---|---|---|
| Sized on | Value, cost, exit | Rent vs payment | Income and borrower |
| Best for | Under-leased or down units | Stabilized, leased property | Seasoned operators |
| Term | Short, interest-only | Long-term (30-year fixed spine) | Varies |
| Role | Bridge | Typical takeout | Alternative |
For program detail on the permanent side, the complete DSCR loans guide covers leverage tiers, credit, reserves, and eligible property types. Most DSCR programs in the network want around a 660 score, and 700+ unlocks the strongest leverage tiers.
A broker’s observation: investors tend to compare hard money by its advertised percentage and overlook the cash gap underneath. A building that looks cheap because it is half empty often needs more of your own money than a stabilized one. Ask each lender what is held back before you compare any two quotes.
What to Bring on Day One
A clean package shortens the lender’s questions and strengthens your plan. Bring:
- The current rent roll and leases, plus vacancy history.
- A unit-by-unit status sheet marking which units are down and which are simply unleased.
- Your scope, budget, and contractor information.
- Rent comps supporting your lease-up targets.
- Proof of liquidity covering down payment, reserve, and a cushion.
- Your track record of completed projects, since leverage tiers depend on it.
Tax treatment varies; consult a qualified professional.
Key Terms Defined
As-is value: What the building is worth today, with its current vacancy and condition.
As-stabilized value: What the building should be worth once it reaches normal market occupancy.
After-repair value (ARV): The expected value after planned renovations are finished.
Loan-to-cost: The loan divided by purchase price plus rehab budget.
Interest reserve: Money held back from loan proceeds to pay interest while the building leases up.
Net operating income (NOI): Income after vacancy and operating expenses, before debt service.
Cap rate: NOI divided by value, used to convert income into a price.
Frequently Asked Questions
Can I get a hard money loan if the building is mostly empty?
Many private lenders will look at it, because low occupancy is the normal starting point for a bridge deal. What they test is whether your plan reaches a stable, reviewable building. On Lendmire’s sheet, though, an existing ten-unit is not offered, since collateral is limited to 1-4 units and ground-up construction up to 10.
Does vacancy lower the loan amount?
Yes, in two ways. It lowers the as-is value, and it lowers the leverage applied to that value. The cash you put in rises as a result, and a reserve for carry usually adds to it.
Who pays the expenses while the building leases up?
You do. The rent roll covers what it can, and an interest reserve escrowed from loan proceeds covers part of the gap. Taxes, utilities, and insurance remain your responsibility.
What happens if the lease-up takes longer than planned?
You usually request an extension, which the lender conditions on occupancy and reserve. Some borrowers pay down principal or refinance into lower leverage. Terms on Lendmire’s program run 6-18 months, interest-only, with no prepayment penalty, so a realistic schedule matters from the start.
Do I need experience to borrow?
Experience raises your leverage, but first-time investors qualify at the lower tiers on programs the network offers. The 620 minimum score and additional conditions below 660 apply, and underwriting stays asset-based. All of it varies by lender, property, and experience.
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. The brokerage arranges financing through select lenders in its wholesale network across 41 markets, including Washington, D.C. You can also reach the team at 828-256-2183.
A half-empty ten-unit is priced on what it will be, but financed on what it is today, and the gap between the two is the cash you bring.
About Lendmire
Lendmire, NMLS# 2371349, is a non-QM mortgage broker serving real estate investors in 41 markets, including Washington, D.C., through DSCR investor loan programs. Qualification is generally reviewed around the subject property’s rental income, not the borrower’s W-2 history — a practical fit for LLC-titled portfolios and self-employed investors. All scenarios remain subject to lender review and program guidelines. Two consecutive Scotsman Guide Top Mortgage Workplace recognitions (2025, 2026).
Get Started
Ready to find the right loan for you?
In about 30 seconds you can review financing options available for your investment property. No commitment required.
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. Appraisals Unlimited – Multifamily & Small Investment Property Appraisals
2. Startdeck – Commercial Real Estate Appraisal 10-Point Guide
3. LegalClarity – Income Approach in Real Estate
4. Freddie Mac Multifamily – Appraisal guidance, potential gross income
5. Janover – Bridge-to-Perm Financing for Multifamily
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 a DSCR Lender Release a Detached Unit From the House? · How to Document Private Loan Money on Your First DSCR Rental Loan · How Much Cash a 2-4 Unit DSCR investor Brings After a Low Appraisal
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
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.