Is 100% Hard Money Financing Realistic for New Investors?
Lender · Sanford, NC · Member since 2024 · 348 posts · 116 votes
Is 100% Hard Money Financing Realistic for New Investors?
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Lender · Member since 2022 · 217 posts · 148 votes
1yFor a short-term rehab project, 100% financing on purchase and rehab is not all that uncommon. Several regional lenders offer it in some form, usually with experience requirements but not in every case.
Of course, normal profit margins are needed/expected, so the loan cost is usually capped at 70-75% of ARV and that right there is the margin of safety. Purchase and rehab costs kept within this ceiling would be 100% covered. That's correct - no money down. No gap funds, second lien, seller financing, etc needed. Very simple.
Of course, lender fees and third-party closing fees (title/insurance/appraisal) are not typically covered and are expected to be the borrower's skin in the game. Thus, available liquidity of at least $20-25k+ is expected to cover closing costs, a few interest-only payments, and partial rehab spending before draw reimbursement.
Fees are usually reasonable for hard money and in line with the higher leverage offered in such cases - 11-13% and 2-4 points, i.e. perhaps a tick higher than the mass of 10-20% down offerings out there.
21 Replies
- 1yStephanie MedellinBusiness MemberMortgage Broker · CA · Member since 2014 · 1k+ posts · 642 votes
No, I don't see 100% financing as realistic at all on investment properties.
I've seen one hard money lender allowing 100% combined LTV, where they would finance up to half if the seller finances the other half. Normally lenders don't even want the CLTV to exceed a certain percentage. The rates and points were exorbitant - somewhere close to 15% with 5+ points. It didn't make sense.
Most hard money is based on low LTV. Lenders are willing to lend on less than perfect deals solely because there is equity available if the borrower defaults.
Owner occupied properties are a different story, and 100% is definitely possible in a lot of cases whether through down payment assistance or USDA or VA loans.
Stephanie Medellin, Loan Factory58 Reviews - Lender · Member since 2022 · 217 posts · 148 votes1y
For a short-term rehab project, 100% financing on purchase and rehab is not all that uncommon. Several regional lenders offer it in some form, usually with experience requirements but not in every case.
Of course, normal profit margins are needed/expected, so the loan cost is usually capped at 70-75% of ARV and that right there is the margin of safety. Purchase and rehab costs kept within this ceiling would be 100% covered. That's correct - no money down. No gap funds, second lien, seller financing, etc needed. Very simple.
Of course, lender fees and third-party closing fees (title/insurance/appraisal) are not typically covered and are expected to be the borrower's skin in the game. Thus, available liquidity of at least $20-25k+ is expected to cover closing costs, a few interest-only payments, and partial rehab spending before draw reimbursement.
Fees are usually reasonable for hard money and in line with the higher leverage offered in such cases - 11-13% and 2-4 points, i.e. perhaps a tick higher than the mass of 10-20% down offerings out there.
- 1yMike GrudzienPro MemberLender · Eugene, OR · Member since 2019 · 2k+ posts · 1k+ votes
Quote from @Ryan Stuckey:
For a short-term rehab project, 100% financing on purchase and rehab is not all that uncommon. Several regional lenders offer it in some form, usually with experience requirements but not in every case.
Of course, normal profit margins are needed/expected, so the loan cost is usually capped at 70-75% of ARV and that right there is the margin of safety. Purchase and rehab costs kept within this ceiling would be 100% covered. That's correct - no money down. No gap funds, second lien, seller financing, etc needed. Very simple.
Of course, lender fees and third-party closing fees (title/insurance/appraisal) are not typically covered and are expected to be the borrower's skin in the game. Thus, available liquidity of at least $20-25k+ is expected to cover closing costs, a few interest-only payments, and partial rehab spending before draw reimbursement.
Fees are usually reasonable for hard money and in line with the higher leverage offered in such cases - 11-13% and 2-4 points, i.e. perhaps a tick higher than the mass of 10-20% down offerings out there.
Ryan does a great job on his analysis, breaking it down in practical terms.
- 1yJ CastroBusiness MemberLender · Florida · Member since 2025 · 697 posts · 248 votes
Quote from @Ryan Stuckey:
For a short-term rehab project, 100% financing on purchase and rehab is not all that uncommon. Several regional lenders offer it in some form, usually with experience requirements but not in every case.
Of course, normal profit margins are needed/expected, so the loan cost is usually capped at 70-75% of ARV and that right there is the margin of safety. Purchase and rehab costs kept within this ceiling would be 100% covered. That's correct - no money down. No gap funds, second lien, seller financing, etc needed. Very simple.
Of course, lender fees and third-party closing fees (title/insurance/appraisal) are not typically covered and are expected to be the borrower's skin in the game. Thus, available liquidity of at least $20-25k+ is expected to cover closing costs, a few interest-only payments, and partial rehab spending before draw reimbursement.
Fees are usually reasonable for hard money and in line with the higher leverage offered in such cases - 11-13% and 2-4 points, i.e. perhaps a tick higher than the mass of 10-20% down offerings out there.
@Ryan Stuckey Great way to explain it! You hit the nail on the head.
- 1yErik EstradaBusiness MemberLender · Member since 2022 · 6k+ posts · 1k+ votes
I have only heard of a few lenders offering this in specific states. Usually Texas/TN markets. They seem legit as I have lost a few deals because of their 100% rehab and purchase programs.
The hurdle though is the exit which I am seeing with a lot of investors that are over leveraged on 90/100 loans. The DSCR is too low to refinance as a rental, and the LTV is too low to not come in with cash to closing. Property is not selling and they are running out of time on these loans. It ends up being more costlier in the end as they are paying extensions, higher interest rates etc..
LuxePrivate Investments LLC 572 Reviews - New to Real Estate · Miami, FL · Member since 2024 · 1k+ posts · 457 votes1y
Deborah, you're right, 100% financing is often seen as unrealistic, especially for newer investors. But there are structured programs out there that make it possible, depending on the deal, credit, and overall borrower profile.
One approach we've seen work well is a funding product that covers 100% of both purchase and rehab costs, with leverage based on ARV. It's built to help investors stay liquid and move quickly on multiple projects, which is often the main barrier for newer flippers with good deals in hand but limited cash.
The structure is simple:
Borrowers with a 650–699 credit score can go up to 65% of ARV, 700+ up to 70%, and those with 3+ past HUDs and a 700+ score can go up to 75% ARV. There's no income verification, no interest reserves, and experience isn't required. The loan runs on a 9-month term with no prepayment penalty.It's definitely not a one-size-fits-all solution, but it can be a solid option in markets where values and margins support it. Let me know if you need any help with financing.
Best,
Drago - Lender · Member since 2022 · 217 posts · 148 votes1y
Short-term loan size at 70-75% of ARV is a routine rate-term refinance on the eventual long-term loan. Regardless of whether the borrower has 90/100% LTC or 100/100% LTC on it.
Of course, the borrower has to execute the project well (stay within the rehab budget, stay on schedule to control holding costs, do quality work) to achieve the expected ARV at the end of rehab.
If off a little on final ARV, then the rate-term refinance up to 80% LTV helps to absorb that difference. If off a lot, well then it was not a great project performance.
- 1yCam SchwartzBusiness MemberLender · Chicago, IL · Member since 2024 · 102 posts · 48 votes
Quote from @Deborah Wodell:
I’ve had quite a few new investors come in lately asking about 100% financing through hard money — meaning no money down, with both the purchase and rehab fully covered by the lender.
From what I’ve seen, that’s pretty rare unless there’s some creative structuring involved.
I know it can sometimes be done through JV partnerships, seller financing in second position, or gap funding — but even then, it's usually based on the deal's strength, experience, and having the right connections.
For those of you who’ve been in the game a while — have you seen a true 100% financing deal happen for a new investor? If so, how was it structured?
Curious how you all explain this to beginners who are eager to jump in but don’t have much capital yet. Would love to hear your insights, advice, or even deal examples!
Hey Deborah, 100% financing is possible to your point but often done through creative measures similar to those you've mentioned.
The primary reason lenders require a down payment of some form is to ensure alignment of incentives. Its easy for a borrower to walk away from a difficult project if they don't have any cash tied up - this creates challenges for lenders who aren't always set up to take over the investment.
I've seen plenty of 100% financing offers in FB groups but presume many of them are illegitimate. For reference, our best offer is 10% down + 100% of rehab costs.- Lender · Member since 2022 · 217 posts · 148 votes1y
Quote from @Cam Schwartz:
Quote from @Deborah Wodell:
I’ve had quite a few new investors come in lately asking about 100% financing through hard money — meaning no money down, with both the purchase and rehab fully covered by the lender.
From what I’ve seen, that’s pretty rare unless there’s some creative structuring involved.
I know it can sometimes be done through JV partnerships, seller financing in second position, or gap funding — but even then, it's usually based on the deal's strength, experience, and having the right connections.
For those of you who’ve been in the game a while — have you seen a true 100% financing deal happen for a new investor? If so, how was it structured?
Curious how you all explain this to beginners who are eager to jump in but don’t have much capital yet. Would love to hear your insights, advice, or even deal examples!
Hey Deborah, 100% financing is possible to your point but often done through creative measures similar to those you've mentioned.
The primary reason lenders require a down payment of some form is to ensure alignment of incentives. Its easy for a borrower to walk away from a difficult project if they don't have any cash tied up - this creates challenges for lenders who aren't always set up to take over the investment.
I've seen plenty of 100% financing offers in FB groups but presume many of them are illegitimate. For reference, our best offer is 10% down + 100% of rehab costs.As I wrote above:
For a short-term rehab project, 100% financing on purchase and rehab is not all that uncommon. Several regional lenders offer it in some form, usually with experience requirements but not in every case.
....these companies all have websites and are easy to find online or offline (at investor events). It's not "creative finance" to obtain it.
They are not posting on FB groups offering 100% financing at 3% with a gmail address.
Borrowers getting 100% financing on purchase and rehab still have respectable cash invested into the project (e.g. between $6-20k closing costs depending on loan size). Sure, that's less $ than contributing a down payment but still enough to keep them on the whole motivated to finish (otherwise these lenders would not offer the program, they're experienced at this and not dumb). - 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Cam Schwartz:
Quote from @Deborah Wodell:
I’ve had quite a few new investors come in lately asking about 100% financing through hard money — meaning no money down, with both the purchase and rehab fully covered by the lender.
From what I’ve seen, that’s pretty rare unless there’s some creative structuring involved.
I know it can sometimes be done through JV partnerships, seller financing in second position, or gap funding — but even then, it's usually based on the deal's strength, experience, and having the right connections.
For those of you who’ve been in the game a while — have you seen a true 100% financing deal happen for a new investor? If so, how was it structured?
Curious how you all explain this to beginners who are eager to jump in but don’t have much capital yet. Would love to hear your insights, advice, or even deal examples!
Hey Deborah, 100% financing is possible to your point but often done through creative measures similar to those you've mentioned.
The primary reason lenders require a down payment of some form is to ensure alignment of incentives. Its easy for a borrower to walk away from a difficult project if they don't have any cash tied up - this creates challenges for lenders who aren't always set up to take over the investment.
I've seen plenty of 100% financing offers in FB groups but presume many of them are illegitimate. For reference, our best offer is 10% down + 100% of rehab costs.
yup FB 100% loan adverts are generally going to be due diligence up front fee scammers - Lender · Sanford, NC · Member since 2024 · 348 posts · 116 votes1yAgree with this. They are setting high expectations out there for people who are doing honest business.
Quote from @Jay Hinrichs:
Quote from @Cam Schwartz:
Quote from @Deborah Wodell:
I’ve had quite a few new investors come in lately asking about 100% financing through hard money — meaning no money down, with both the purchase and rehab fully covered by the lender.
From what I’ve seen, that’s pretty rare unless there’s some creative structuring involved.
I know it can sometimes be done through JV partnerships, seller financing in second position, or gap funding — but even then, it's usually based on the deal's strength, experience, and having the right connections.
For those of you who’ve been in the game a while — have you seen a true 100% financing deal happen for a new investor? If so, how was it structured?
Curious how you all explain this to beginners who are eager to jump in but don’t have much capital yet. Would love to hear your insights, advice, or even deal examples!
Hey Deborah, 100% financing is possible to your point but often done through creative measures similar to those you've mentioned.
The primary reason lenders require a down payment of some form is to ensure alignment of incentives. Its easy for a borrower to walk away from a difficult project if they don't have any cash tied up - this creates challenges for lenders who aren't always set up to take over the investment.
I've seen plenty of 100% financing offers in FB groups but presume many of them are illegitimate. For reference, our best offer is 10% down + 100% of rehab costs.
yup FB 100% loan adverts are generally going to be due diligence up front fee scammers
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes1y
Quote from @Deborah Wodell:
I’ve had quite a few new investors come in lately asking about 100% financing through hard money — meaning no money down, with both the purchase and rehab fully covered by the lender.
From what I’ve seen, that’s pretty rare unless there’s some creative structuring involved.
I know it can sometimes be done through JV partnerships, seller financing in second position, or gap funding — but even then, it's usually based on the deal's strength, experience, and having the right connections.
For those of you who’ve been in the game a while — have you seen a true 100% financing deal happen for a new investor? If so, how was it structured?
Curious how you all explain this to beginners who are eager to jump in but don’t have much capital yet. Would love to hear your insights, advice, or even deal examples!
The only time I have seen it is balance sheet lenders who cross collateralize with other assets - but at end of day theLTV is still down around 75% or lower. Why would a lender risk giving 100% financing when selling costs on a home are around 10%?
7e investments53 Reviews - Rental Property Investor · Emmaus, PA · Member since 2021 · 152 posts · 85 votes1y
From my experience, it is very hard to get a 100% financed deal. Most lenders just won't accept you not having any "skin in the game". However, that doesn't stop me from trying to get my deals 100% financed...eventually I may find a way to make it happen.
Personal story - I've had a deal under contract before where the bank would provide 75% of the financing. I then made a deal with the seller where they would pay for ALL closing costs and hold 25% of the debt with NO lien on the property. It would've been a true 100% financed property. I thought the bank would give it the "OK" since there was no additional lien on the property, but they still said no and lowered the amount they were willing to lend. I was upset to say the least.
- Lender · Member since 2022 · 217 posts · 148 votes1yYou simply haven't found the several hard money lenders willing to do "100% financing"* on purchase and rehab as part of their program. Or the private lenders in your area who might do that (especially if they know and trust you).
Quote from @Kyle Vogeler:
From my experience, it is very hard to get a 100% financed deal. Most lenders just won't accept you not having any "skin in the game". However, that doesn't stop me from trying to get my deals 100% financed...eventually I may find a way to make it happen.
Personal story - I've had a deal under contract before where the bank would provide 75% of the financing. I then made a deal with the seller where they would pay for ALL closing costs and hold 25% of the debt with NO lien on the property. It would've been a true 100% financed property. I thought the bank would give it the "OK" since there was no additional lien on the property, but they still said no and lowered the amount they were willing to lend. I was upset to say the least.
Asking "banks" for this will go nowhere.
Even when 100% of purchase and rehab costs are covered, that's not everything. Closing costs are not nothing. By paying this respectable chunk of money, the borrower HAS SKIN IN THE GAME (enough for the hard money lenders to feel so).
*"100% financing" means: coverage of purchase + rehab costs (realistic, especially with some experience)
"100% financing" does not mean: coverage of purchase + rehab costs + closing costs (not realistic)
- Specialist · NJ · Member since 2022 · 1k+ posts · 652 votes1y
Is it out there for a brand new investor? If it is, I'd love to see the loan cap, interest rate, and origination.
So, at big box lenders I know of two that have the 100% program with the loan cap at 70% ARV. To get in that program you need 30 exits in last three years. The door gets shut in your face there.
Would a private lender do 100% financing for a new investor? All I can tell you is, if you find 100% financing from Private Money for new investors, forget about taking out a loan, tell the PML that you'll be a broker and sell his money cause that would sell like hot cakes. I know there is a lot of discussion about Private Money on here and I have dealt with quite a few in my time, they are no cheaper/better than HML. Door closed here.
Local HML - these are your best shot at the high leverage loans. They know the market, the assets, the agents. I hear they will sometimes go to 100% financing but with fine print and conditions and you need to qualify and the project needs to have a good deal spread.
- 1yJake YuskaitisBusiness MemberLender · New Jersey, USA · Member since 2022 · 254 posts · 67 votes
do not ever expect or plan for 100% financing as a beginner.
Frontier Funding LLC533 Reviews - Lender · Irvine, CA · Member since 2025 · 27 posts · 8 votes1y
I’ve had a lot of newer investors ask me the same thing. The truth is:
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100% hard money financing does exist, but it's usually capped at ~70–75% of ARV. In other words, the lender is still protected by the equity cushion. If purchase + rehab fit under that ceiling, you might technically see "no money down" — but you'll still need cash for closing costs, interest payments, and often a portion of rehab before reimbursement.
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Beginners: lenders almost always want to see some skin in the game. The easiest way I explain it is — if you have zero dollars invested, it’s too easy to walk away when things get hard. That’s why 100% deals are rare for first-timers.
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Alternatives: joint ventures, seller seconds, or cross-collateralization with another property can fill the gap. Those structures take relationships and careful paperwork, but they're often more realistic than expecting a true 100% LTV loan as your first deal.
Bottom line — if you’ve got a great deal, money will find it. But going in expecting “100% financing, no experience, no cash” usually sets up disappointment. A little capital reserves go a long way in making sure you can ride out bumps and actually finish the project.
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- Specialist · fremont, NE · Member since 2014 · 161 posts · 42 votes1yThe only ways this would be possible, with lenders I work with are:
Quote from @Deborah Wodell:
I’ve had quite a few new investors come in lately asking about 100% financing through hard money — meaning no money down, with both the purchase and rehab fully covered by the lender.
From what I’ve seen, that’s pretty rare unless there’s some creative structuring involved.
I know it can sometimes be done through JV partnerships, seller financing in second position, or gap funding — but even then, it's usually based on the deal's strength, experience, and having the right connections.
For those of you who’ve been in the game a while — have you seen a true 100% financing deal happen for a new investor? If so, how was it structured?
Curious how you all explain this to beginners who are eager to jump in but don’t have much capital yet. Would love to hear your insights, advice, or even deal examples!
1) Large construction projects, of +$10M. If they are in the construction business, then up to 100% LTC/LTV can be an option. If they don't have that experience, they would need to team up with someone who does have experience, and probably not just a general contractor and team. Still, if they're determined, and can get a construction team on board for that, then it could be possible. If it's not +$10M, then it usually caps at up to 90%.
2. If the can get NNN properties of +$2M, then up to 100% can be an option, dependent upon the tenants credit. Again, they should have a good team in place for this, since they are new, so that way, when the inevitable happens, they have someone who can help them get through it.
That's my $2 (up from $0.02, due to inflation).
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