Do you need money in the bank to get a hard money

[Sean Johnson]

Do you need a significant amount of money in the bank to get a hard money?

[David Haynes]

@Sean Johnson

A hard-money lender typically lends you 60-75% of the purchase price and rehab. So let's say you are purchasing a $50,000 property that needs another $50,000 in rehab ($100,000 in all). They will lend you $75,000 (75%) and will expect you to bring the other $25,000 (25%). The subject property is the collateral they will claim if you become delinquent in your payments.

If you are wanting to invest with $0 down, you will need to bridge that $25,000 (the remaining 25%) with funding from a private investor, friends, or family. It is typically not a wise choice to do this. To be 100% leveraged is risky and somewhat irresponsible unless you have an amazing deal and/or are an experienced real estate investor.