Hard Money

[Melissa K.]

Hello! I am interested in fixing and flipping houses, however, at the time, I do not have money for a down payment. I have read a ton of info on line stating that hard money lenders will lend on the ARV. I read on this site yesterday a discussion where people were saying that hard money lenders require a down payment. Which is correct?

[Rivers Plowden]

They do lend on ARV, but also require a down payment. They usually word their criteria as follows, "70% of ARV or 90% of cost (purchase price + renovation budget combined), the lesser of the two."

I have seen as high as 85% ARV, but it's all dependent on the lender and your credentials. Look under the "Marketplace" tab above and go to the hard money lenders section to see who lends in your area and then you can shop around.

They are more lenient as far as where the down payment comes from versus most banks.  I think they will usually allow a borrowed down payment whereas your typical bank doesn't like the down payment financed in any way.

Hope this helps.