The Quick Read: Usually not: the amount a hard money lender advances on a flip comes from the project and the experience of the person guaranteeing the loan, and putting title in an LLC changes who signs, not how the loan is sized against project cost and after-repair value. The LLC becomes the borrower of record. The lender still underwrites the individual behind it.
- Across Lendmire’s wholesale network, flip leverage is tiered by completed projects: typically 85% of project cost with fewer than 2, 90% with 2 or more, and 93% with 5 or more. Every tier is capped at 75% of after-repair value, and the figures vary by lender, property, and experience.
- A brand-new LLC does not reset or raise your experience tier. The tier follows the person.
- Expect a personal guaranty even when the LLC is the borrower.
- An LLC can matter for eligibility, documents, and your exit, even though it does not move the loan amount.
What an LLC Changes and What Stays the Same
An LLC changes the name on the note, the documents you submit, and the signature pages at closing. It does not change the sizing formula, the credit review of the guarantor, or your cash needs. Think of it as a different wrapper around the same deal.
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.
| Factor | With an LLC | Same either way |
|---|---|---|
| Borrower of record | The LLC | The project and exit plan |
| Documents | Entity papers added | Budget, scope, purchase contract |
| Signatures | Officer page plus guaranty | Guarantor is reviewed |
| Leverage tier | Unchanged | Based on completed projects |
| Cash to close | Unchanged | Equity, reserves, closing costs |
The reason is simple. Hard money is asset-based lending. The lender is betting on the property, the plan, and your exit, and then on you as the person responsible for carrying it out. A new LLC has no credit history and no track record of its own. So the lender looks through it to the owner.
How Does a Hard Money Lender Size a Flip Loan?
The loan equals the lowest of several caps. Most programs test a percentage of your project cost, meaning purchase price plus rehab budget. They also test a percentage of the after-repair value, or ARV, which is the property’s expected value once the work is done. Whichever test gives the smaller number sets the loan.
Across the network, the typical structure looks like this. It varies by lender, property, and experience, and nothing here is a commitment to lend.
| Completed projects | Typical leverage (of project cost) | Value cap |
|---|---|---|
| Fewer than 2 | 85% | 75% of ARV |
| 2 or more | 90% | 75% of ARV |
| 5 or more | 93% | 75% of ARV |
The rehab piece works differently from the purchase piece. Up to 100% of the rehab budget can be funded in draws, which are releases of money against completed work. That is a rehab-budget figure. It is not a purchase loan-to-value number, and it does not mean the lender finances 100% of the whole deal. There is no true 100% purchase program, and the top tier is reserved for experienced investors.
Terms usually run 6 to 18 months, interest-only, with no prepayment penalty. Loan amounts go up to $5,000,000, with larger loans by exception. Collateral is non-owner-occupied residential property with 1 to 4 units. Ground-up construction can go to 10 units.
Worked Example: Same Deal, Two Ways to Hold Title
Run the numbers on a flip where you hold two completed projects, so the 90% tier applies. The lender runs the same two tests whether you sign personally or through an LLC. The inputs below are modeled assumptions, not market data.
Scenario A: project cost equals 70% of ARV. Ninety percent of that cost is 63% of ARV. That sits under the 75% cap, so the cost test sets the loan. It is the same loan whether you sign personally or through an LLC.
Scenario B: project cost equals 88% of ARV. Ninety percent of that cost would be 79.2% of ARV. The 75% cap is lower, so the value test sets the loan. Again, the entity changes nothing.
The second scenario is where many new flippers get surprised. The experience tier tells you the maximum percentage of cost. The ARV cap often decides the real number. A thin-margin deal gets less leverage no matter how it is titled, and you cover the gap with cash. For how much equity a top-tier rehab typically needs, see Lendmire’s piece How Much Equity a Top-Leverage Hard Money Rehab Needs for DSCR Cash-Out.
Whose Credit Counts With an LLC?
The guarantor’s credit counts. An LLC can hold title and borrow, but the lender still evaluates the individual behind it, according to Sims Ventures’ fix-and-flip requirements guide. Across the network, most hard money loans carry a personal guaranty from the owner, even when an LLC is the borrower.
Here is how the pieces line up:
- Credit: Programs in the network start at a 620 minimum score, with additional conditions below 660. First-time investors qualify at the lower leverage tiers. This varies by lender and property.
- Experience: The lender counts completed projects by the guarantor. A freshly formed LLC does not lose your past deals, and it does not gain any either.
- Underwriting stays asset-based: The property, the plan, and the exit drive the file. Credit and experience set the tier and the conditions.
This is why forming a new entity right before a loan request does not raise your leverage. The experience tier follows the person.
Documenting your track record is what moves you up a tier. Settlement statements and a project ledger beat photos. Lenders generally look at recent completed projects, and the exact lookback varies by lender.
Do You Need an LLC for Hard Money at All?
It depends on the lender. Many lenders in the network prefer or require a business entity, and some allow closing in an individual’s name. Whether an individual can borrow depends on the program, the property, and the lender’s file requirements.
Practically, an LLC makes sense for most flippers for reasons that have little to do with loan size. It can help separate project liabilities from your other assets, and it keeps vesting clean if you refinance later. Loan repayment is a different matter. The guaranty keeps you personally responsible for the loan itself.
Remember one further point. An LLC is not a fix for personal use. Hard money programs here are business-purpose only. They cover non-owner-occupied property. An LLC on title does not override facts pointing to personal occupancy.
What Does the LLC Add to Your File?
The entity adds paperwork. A typical file includes the operating agreement, articles of organization, the EIN, and proof of ownership and signing authority. On top of that sit the normal flip documents: the purchase contract, an itemized rehab budget, a scope of work, and your experience record.
Details that cause delays and corrections:
- Name consistency. A mismatch between the purchase contract, the LLC name, the bank account, and the loan application can force a correction before closing, as Sims Ventures notes.
- Foreign-state entities. An LLC formed in one state generally cannot take title in another until it completes foreign qualification there. Decide this before you go under contract.
- Sequencing. Form the entity, get the EIN, and open the bank account first. Then sign the purchase contract in the LLC’s name. Closing personally and deeding to the LLC afterward can run into the loan documents, so ask before you transfer anything.
The loan is made to your entity, and it is available through Lendmire’s broker channel across 41 markets, including Washington, D.C., subject to lender program eligibility.
Partners and Layered Ownership
In a two-partner flip, both partners typically sign the guaranty, and one signs for the LLC. Signing as an officer and signing as a guarantor happen on separate pages. Mixing up the capacities is a common closing error, so confirm who signs what before the closing appointment.
Credit and experience can be combined in a useful way. If one partner falls short of the lender’s credit floor, a qualified partner can often serve as guarantor, depending on the lender. If one partner has the track record and the other has the cash, name the experienced partner as a guarantor early. Choosing guarantors at the start beats rebuilding the file halfway through.
When Is Business Purpose Questioned?
This is a business-purpose loan. Federal consumer-credit rules exempt credit extended primarily for a business purpose, and credit extended to someone other than a natural person, as laid out in 12 CFR 1026.3. The CFPB’s official commentary adds that a creditor must determine the primary purpose in each case. It also treats credit to acquire a rental as business-purpose when the property has more than 2 units, and credit to improve a rental the same way above 4 units.
For you, that means lenders document the business purpose carefully on small flips. On a 1 to 4 unit property, expect questions about the intended use and the exit plan. An LLC helps the paper trail, but it does not replace the facts.
Common Myths
The myth: an LLC makes the loan non-recourse. The reality: a personal guaranty is a normal lender convention on flips. The LLC protects you from other project liabilities, but not from the lender on this loan.
The myth: an LLC raises borrowing power. The reality: leverage follows credit, experience, and the deal. The tier is tied to the guarantor’s completed projects.
The myth: with a guaranty, the LLC is pointless. The reality: the guaranty covers repayment of this loan. The LLC still helps with other project liabilities, such as contractor claims, and keeps vesting clean for the next step.
The myth: hard money lenders ignore your credit. The reality: the deal weighs more, but credit, experience, and liquidity still shape the tier and conditions.
The myth: any investment property is exempt from consumer rules automatically. The reality: purpose and unit count matter, so lenders document it.
What Does the LLC Do for Your Exit?
An LLC carries best into the next step. Many investors refinance out of hard money into long-term rental financing once the property is stabilized, and Lendmire brokers that path through DSCR lenders in the network. Many DSCR lenders accept LLC vesting, so a flip entity can often roll into a rental refinance without a deed change. Titling consistently from the start is what makes that possible. The complete DSCR loans guide explains how rental coverage drives that kind of refinance.
For what a BRRRR-style refinance returns after the hard money payoff, see Lendmire’s piece How Much a BRRRR Cash-Out Refinance Returns After Hard Money Payoff.
One planning note on liability. A personally guaranteed hard money loan can show up in your personal debt picture when you apply for the next loan. Plan your reserves and paperwork with that in mind.
Key Terms Defined
Borrower of record: the person or entity named as the borrower on the note, which is your LLC if title is held that way.
Guarantor: the individual who personally promises to repay the loan if the borrower does not, and whose credit and experience the lender reviews.
Loan-to-cost: the loan amount as a percentage of project cost, meaning purchase price plus rehab budget.
After-repair value (ARV): the property’s expected market value once the planned rehab is complete.
Draws: releases of rehab funds against work already completed.
Foreign qualification: the registration an LLC needs to do business in a state other than where it was formed.
Vesting: how title to the property is held, whether in your name or in an entity.
What to Prepare Before You Ask for a Quote
Gather these before you talk to a broker:
1. A list of completed projects with settlement statements, scopes, and outcomes.
2. Your credit profile and a personal financial statement showing liquidity.
3. The purchase contract, itemized rehab budget, and scope of work.
4. Your LLC documents: operating agreement, articles of organization, EIN, and proof of signing authority.
5. Your exit plan, either a sale or a rental refinance.
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.
This article is general information, not legal or tax advice. How you hold title, and the tax treatment that follows, varies by situation, so consult a qualified attorney or CPA about your own deal.
Frequently Asked Questions
Does an LLC raise my hard money loan amount?
No. The loan is sized on project cost and after-repair value, tiered by the guarantor’s completed projects. Typical network tiers are 85%, 90%, and 93% of project cost, capped at 75% of ARV, and they vary by lender, property, and experience.
Do I need an LLC to get a hard money flip loan?
Not always. Some lenders prefer or require an entity, and some allow closing in an individual’s name. Ask early, because the vesting decision should be made before you sign the purchase contract.
Am I still personally liable if the LLC borrows?
Usually yes. Most hard money flip loans carry a personal guaranty from the owner, so the LLC protects other project liabilities but not repayment of this loan.
Does a brand-new LLC lose credit for my past flips?
No, because the experience tier follows you as the guarantor. You do need to document those projects, so keep settlement statements and a project ledger ready.
Does the LLC change how much cash I need at closing?
No. Cash needs come from the leverage tier, the ARV cap, your reserves, and closing costs. A thin-margin deal needs more cash, regardless of title.
For current guidelines and terms, see Lendmire’s DSCR loan programs page.
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).
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References
1. Sims Ventures – Fix and Flip Requirements
3. CFPB – Regulation Z §1026.3
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 Get a Hard Money Loan With No Down Payment? · Is a Bridge Loan Different From Hard Money for Investors? · Should You Use Hard Money for a Rental Then Refinance to DSCR?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.