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Updated over 5 years ago on . Most recent reply
![Nicholas K.'s profile image](https://bpimg.biggerpockets.com/no_overlay/uploads/social_user/user_avatar/586825/1621493213-avatar-nicholask20.jpg?twic=v1/output=image/crop=2320x2320@594x0/cover=128x128&v=2)
Need Help Understanding Hard Money Loans. Thank You!
I am new to the BRRR process and I am trying to wrap my head around how hard money loans work. My questions are; Does the money pay for the property and the rehab costs? Do I put a down payment down? And if so, does the down payment cover the reno costs and the cost of the property? Or is it just for the property?
Thanks in advance!
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@Nicholas Krogmann as stated below it varies by lender, for my current loan I have 70% ARV, 80% LTV, I had to bring 20% of the LTV to the table, I financed my repairs but it works on a draw schedule, I pay for my renovations out of pocket in 5K increments then call the lender, the come out and verfiy and reimburse me for what I spent.