Is 100% Hard Money Financing Realistic for New Investors?

Question

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!

Ryan Stuckey · Answer

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.

Chris Seveney · Answer

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%?

Ryan Stuckey · Answer

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.

Erik Estrada · Answer

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..

Mike Grudzien · Answer

Ryan does a great job on his analysis, breaking it down in practical terms.

Kyle Vogeler · Answer

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.

Cam Schwartz · Answer

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.

Ryan Stuckey · Answer

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.

Drago Stanimirovic · Answer

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

Is 100% Hard Money Financing Realistic for New Investors?

Most Popular Reply