Tag Archive for: # fix and flip loan

I’m Stuck in a Hard Money Loan: How to Get Out

I’m Stuck in a Hard Money Loan: How to Get Out

Today we will discuss the common reasons why investors get stuck in a hard money loan and provide practical strategies to break free. From exploring refinancing options to making timely decisions, we’ll guide you toward regaining control of your investment journey. 

Two main reasons:

  1. Project Delays:

    Construction or permit delays extend project timelines far beyond what was initially planned. Since most hard money loans have fixed terms, borrowers are faced with the option to either secure additional funding to complete the project or sell the property.

  2. Property Not Selling:

    This is due to either overpricing or market conditions. By continuing to hold onto the property without adjusting the price, it results in significant financial losses.

How to Get Out:

  1. Refinance with Another Hard Money or Bridge Loan:

    Secure a new loan in order to provide the necessary funds to either complete the project or aid in  the sale of the property. This option allows investors to regain control and momentum in their projects.

  2. Sell the Property As-Is:

    Sometimes, the best course of action is to sell the property in its current condition to another investor. While this may result in a loss, it also prevents further financial bleeding caused by holding onto the property.

  3. Refinance into a Long-Term Loan:

    Investors can refinance into a long-term loan, such as a permanent loan or a traditional bank loan. This option also allows investors to transition the property into a rental, which can decrease monthly losses or potentially create a profit.

Save Your Deal:

  • Don’t Get Stuck:

    Don’t fall into the trap of continuing to invest in a project solely because you’ve already sunk money into it. Assess the current market conditions and make decisions based on realistic projections rather than past investments.

  • Quick Decision Making:

    When faced with a stagnant property, make timely decisions to either adjust the price for a quick sale or pursue refinancing options. Don’t risk losing time and money because of indecision.

  • Seek Professional Guidance:

    Reach out for expert advice and assistance today. Consulting with experienced lenders or real estate professionals can provide valuable insights and help navigate challenging situations.

Get Help Today!

Contact us today! There are solutions available to help you regain control of your investment. Reach out to HardMoneyMike.com for expert guidance and support. Whether you need refinancing options, project advice, or assistance with navigating your loan terms, we’re here to help.

Watch our most recent video to find out more.


Can I Get 100% Financing with Hard Money?

Can I Get 100% Financing with Hard Money?

While hard money is flexible, can you really achieve 100% financing with hard money? The answer is yes! The beauty of true hard money is that you can achieve 100% financing for flips. While there are some situations where we can’t do 100% financing, it is possible in most cases. For investors who are doing flips or even BRRRR rentals, they are getting the properties at a discount. This is what makes it possible to cover all of the financing for the property. How can you get a hard money loan to cover the purchase, rehab, and closing costs? Let’s take a closer look!

Who can we help?

Here at Hard Money Mike we can help those who do 20 to 30 properties a month, as well as those who are just starting out in real estate investing! Unlike most large lenders that don’t do 100% financing, we are able to as long as it’s a really good deal. A good deal is one that is all in at 70% to 75% ARV, as well as where the property is at. Just to clarify, ARV stands for after repair value or what you can sell the property for after all of the repairs have been done. 

For example:

If you are going to sell something for $400K, we can lend up to 75% of that ARV. You will need to put the purchase price, rehab, and some of the closing costs in there in order to make it work. In situations like these, we would be able to finance at 100%. For investors who have multiple projects going at once, 100% financing can make a huge difference in their success.

What is a good deal?

A good deal is one that you are going to make money on. All lenders want is to have investors make money, pay them back, and do it again. Another important factor that we look at as a hard money lender is where the property is located.  While some properties might be easy to find comps, there are some rural properties that are harder to find comps on. In order to be successful in real estate investing, it is important that you not only make sure the location is good, but that you also create a property that is sellable. A hard money loan can help you achieve your success without requiring money out of your pocket or the need for a partner.

For example:

We had someone call us who had decided to use his dads money to buy and sell a property. When they got to closing, the dad said that he wanted not only his interest rate but 50% as well. While it seemed to be an easy way to get the money he needed for the investment, it ended up costing him more. A hard money lender might have a higher interest rate compared to traditional lenders, however, it is still a lot cheaper than having a partner.

Leveraging hard money at 100% just makes sense!

Keep in mind that these deals are for a shorter period of time for 6 months or less. This is because you are financing the whole amount. We just funded a deal for $120K. After all is said and done, they are going to make between $30K and $40K. Just by paying a hard money lender $6K to $8K for interest and expenses, they can make a really good profit on the property. That’s where leveraging hard money at 100% just makes sense! 

No hard pulls on your credit!

Another benefit to using hard money is that it doesn’t show up on your credit. This is because we don’t do hard pulls. While you don’t need a good credit score in order to be approved, it is important that you have a decent score. We understand that a lot of investors use their personal credit cards to cover their business expenses. As a result, it can quickly drive down their credit score. Unlike traditional lenders, we have the flexibility you need. Our main goal at Hard Money Mike is to help you succeed in real estate investing! 

We are here to help!

If you have a deal that you are interested in, and want to find out more about 100% financing, give us a call. We are happy to run through the numbers with you to determine if the property will be a good investment. There is a quick form on our website that you can fill out to give a little more information on the property that you are looking at. This form would include information about the property, some details about you, what you are trying to do, exit strategy, credit score, and your reserve. In the end, our goal is to determine if the deal is going to make you money. 

Here at Hard Money Mike we work with “value at” properties and can offer 100% financing today! Contact us to find out more! 

Watch our most recent video Can I Get 100% Financing with Hard Money to find out more!

How to Get 100% Financing For Your Investment Property

How to Get 100% Financing For Your Investment Property

Many investors wonder how they can get 100% financing for their investment property. The answer is a cross lien. What exactly is a cross lien? A cross lien is when you use another property that you own, or one someone else that you know owns, and use it as collateral for the money that you’re looking to obtain. Today we are going to go over how you can get more money from your hard money lenders by using a cross lien. 

How can a cross lien help?

A cross lien can help you get more money for your projects and reach 100% financing. Even those with lower credit scores and little experience can use a cross lien to get the financing they need. Those with little experience experience struggle with LTV, as well as approval for Gap funding. A cross lien can also work for people who need more than 100% to purchase, rehab, or carry the property. Once the lender  has  the additional security or collateral, then they will be able to give you the money you need. To clarify, it doesn’t mean that you’re going to pay off the liens that are already on the property.

What properties are used for a cross lien?

Investment properties, land, commercial properties, and owner occupied properties are eligible for a cross lien. Anything that has equity in it can be used to create extra security for the lender. Just to clarify, equity is the difference between what you owe and what the property is worth. Typically you see 70% or less on equity. When looking at All in, meaning what you owe now and what you’re putting on the property. This needs to be at or below  80% CLTV. Just to clarify, CLTV stands for the combined loan to value that combines the 1st lien on the property plus the 2nd lien. There are exceptions, however, this is a general rule.

Let’s look at an example.

100% financing is needed for a fix and flip, however, the lender is only allowing 85% of the purchase. The borrower now needs to come up with 15%. Where do they get the extra money? The answer is a cross lien. The lender can use another property that the borrower owns in order to have the security they need to provide 100% financing. If you’re looking into using a hard money lender, then they are going to also look at your credit, as well as your  experience, before approving funding. This may result in only 80% for the purchase and 100% of the rehab. In that case you will need 20% of your own money. Again, a cross lien can help to alleviate the pressure of having to come up with additional money and it can increase your cash flow if you are doing multiple projects. 

What does a cross lien look like?

When using a cross lien for additional funding, the lender will come in and do a mortgage or deed on the property you are buying, as well as put a mortgage or deed on the other property. The other property is either a rental, piece of land, commercial, or even an owner occupied. By using two properties or more, you can get the money you want for financing.

When does the other property get released?

There are times when the property is released or the lien is taken off the 2nd before you pay off the 1st. Maybe that is because you have hit a milestone, or maybe the property that you bought is all fixed up and worth enough now to release the cross lien. Once the cross lien is paid off, then the property can be used to finance another investment.

In conclusion.

A cross lien is an excellent way to get 100% financing for your investment property. Maybe funding is a struggle because of your credit score or your experience isn’t there yet. Cross liens get something done, get something purchased, or get the financing you need to succeed. Remember the cross liens when you’re looking for finance options.

Here at Hard Money Mike we have a number of free downloads that can help you. Visit our website to find out more. 

Would you like to find out more about How to Get 100% Financing For Your Investment Property? Watch our most recent video.

Hard Money Vs Banks: Which Lending Option is BEST?

Hard Money Vs Banks: Which Lending Option is BEST?

Investors are always wondering which lending option is best for their needs and when is it better to use hard money instead of banks? Let’s start by identifying what is hard money. Hard money is asset based lending that real estate investors can use when their credit scores are not up to par with bank requirements. Unlike banks, hard money lenders aren’t looking at the credit scores. Instead, they are looking at the project and the property. Today banks are getting tighter and credit score requirements are increasing. As a result there is a decrease in funding. Have no fear! It is still possible to get 100% financing with a credit score below 700. Let’s compare hard money vs banks to determine which option is best for you.

Who uses hard money?

Hard money is for everyone! From the new investor, to those who have 20 years of experience, everyone can benefit from using hard money. Hard money creates flexibility that many banks can not provide. Whether it’s a small deal in a small community, seconds, thirds, or even land, hard money can help you complete any translation that is asset based. As long as the property is good, with a good exit strategy, then you can negotiate to get hard money lending 

What can we do for you at Hard Money Mike?

Here at Hard Money Mike we are able to provide 100% financing on BRRRR and 100% financing on fix and flips, as long as the ARV is good. For clarification, ARV stands for the after repair value. A hard money lender looks at the value of the property and what it can become based on the ARV. That’s another big difference between hard money and banks. It doesn’t matter when you go to a bank, or what kind of a deal you are getting. Banks will only focus on the LTV or loan to value amount.

Let’s look at an example of hard money vs banks:


Property purchase $300K

ARV 600K

Hard Money As a hard money lender, I would feel comfortable lending up to 100% on the deal because it’s a great deal.
Hard money is better than banks when you are basing it on ARV
Banks  If you go to a bank, they will compare the ARV and the purchase price and determine which is lower. In this example, the banks would base their decision on the 300K purchase price. 
From that base amount of 300K, the bank will then require you to put in 20% to 25%.

When you are deciding between hard money and banks, always remember that hard money is best when you have good deals based on the ARV, and when you don’t want to put a lot of money in. This is also true for BRRRR, if you want to find that undervalued property and use a hard money lender to fund 100% of the rehab. Once again, if it’s a good deal based on the ARV in this market at 70% to 75%, and you can refinance it, then hard money has the flexibility that you need. 

Credit score requirements and limitations.

Most hard money lenders do not look at your credit score to make their decision. Instead, they might look at your score to make sure that you are paying, not in bankruptcy, and not in foreclosure. However, hard money lenders will not be concerned by high usage or low scores. These values are not a big deal for hard money lenders. Most importantly, hard money lenders will not kick you out the door because you have a 679 credit score instead of a 680. 

You don’t need to fit into a box.

While banks often have slightly lower rates and longer term options than hard money lenders, banks want you to fit into their box in order to lend. Whether that is meeting their credit score requirements, income requirements, or their coverage ratios, banks do not have the same flexibility as hard money lenders. Flexibility and uniqueness is where you go for your hard money lending. Especially if the property is based on ARV and the value is there. 

3 instances where you should use hard money over banks 

  1. If you want to base your lending off of ARV and have a good deal. 
  2. If you have a credit score that does not hit into the 700s. 
  3. If your income just started or you aren’t 2 years out. 
  4. If you just write everything off. 

What do you need to look for in a hard money lender?

It is imperative that you get a hard money lender who is flexible enough to do your deals when you have a good deal. What is a good deal? A good deal is dependent on whether or not the market is good in the area, if you have a good exit strategy, and a great LTV. Another important factor to consider is if you have a bridge or a lender set up on the other side. Hard money lenders are not looking for deals that are 100% financing with 100% LTV. 

Where do you find hard money lenders?

1. A local person or company

This is a local person or company who is lending true hard money. Make sure that they are well established and have a web presence before diving in. Wall Street has taken over the big loans and only accepts investors who can fit into their box. Hard money on the other hand has no box! It provides the flexibility to fit any investor no matter what the deal. 

2. Real estate groups: 

Connect with the investors in your real estate group. They all know some hard money people who they have worked with in the past. This is especially true if they’ve been in this business for more than three years. By connecting with people in the community, you will find hard money lenders who are reliable.

3. Real estate forums: 

Real estate forums are an excellent place to go and ask questions to find out who the hard money lenders are in your area. There is always a need for hard money in real estate investing. 

What do you look for and what questions should you ask?

First and foremost don’t get involved with a hard money lender who has a lot of up front fees. Some may ask for $1,000 to $5,000 down. Don’t go down that path, because they are just collecting fees, not helping investors. Instead, look for people who have experience within your real estate groups and forums. Do your own research to make sure they are funding deals and have some flexibility with their lending. Whether it is a cross lien, second, or even commercial property. It is also important to ask what they will and won’t lend on. Finally, it is important to start working with them and building that bridge. This will help you in the future if you have another deal that needs hard money lending.

Watch our most recent video to find out more about Hard Money vs Banks to discover which lending option is right for you.

We are here to help you with your hard money needs here at Hard Money Mike. Contact us today to find out more.

How Good Debt Can Make Real Estate Investors Rich

How Good Debt Can Make Real Estate Investors Rich

How can good debt make investors rich? As real estate investors, it is important to differentiate between good debt and bad debt. You do need debt to create income, which in turn creates wealth. That is what real estate investing is all about! Learning how you can create wealth using other people’s money, also referred to as OPM.  You don’t have to be rich, have a college degree, or a PHD to succeed in this business. All you need to understand is how using other people’s money can create wealth and income. Today we will run through the numbers to give a clear picture of what to expect when purchasing a property and how you can get rich off your investment. 

Investors who Fix and Flip

If you’re a flipper and making $50K to $200K a year or more, then it’s very likely and very doable that you will create wealth. All you have to understand is what is good debt and what is bad debt. Good debt is debt that is going to create income and wealth. Real estate investing is all about using leverage, or other people’s money. It may take a little bit of your money, if any, to get started on this venture. In the end it’s all about finding really good properties, undervalued properties, and properties that people no longer want. By purchasing them correctly and using the right debt, you will in turn create income and wealth very quickly. 

Wealth and Income Example for Fix and Flip Investors

Let’s take a look at a normal purchasing situation for a fix and flip investor. This is someone who is doing 4 to 5 properties a year. Yes, you can get into 4 to 5 properties very easily if you are focused and understand your cash flow. In order to accomplish this, you need to use other people’s money for the majority of the expenses, if not all of them, depending on the deal. Keep in mind that a good deal is something that is under 70% all in.

ARV: Is the estimated value of the property after repairs have been completed.

Profit: An average of what you want to make of the sales price. Normally a range between 10% and 15%

ARV = $300,000

Profit at 12% = $36,000  

4 flips a year = $144,000

5 flips a year = $180,000

Numbers break down:

ARV = $300,000 at 75% means that you are all in at $225,000

All in total $225,000 broken down:

Purchase price = $175,000

Rehab budget = $50,000

National lenders: 

10% of purchase price = $17,500

They cover 100% of rehab = ($50,000)

After closing costs and interest you are into this for roughly $25,000 to $30,000 for each property

Now where else can you put in $20,000 to $30,000 and come up with $36,000 in a matter of months? That is money that you are bringing into your life just by using other people’s money, using debt, and doing it correctly. 

How do these numbers compare to other types of investments? 

The majority of investors are only investing in stocks and bonds. If they get 8% then they are happy with their investment. However, if they put in $30,000, then they may only get a $2,400 profit for the year. Compared to the $36,000 that you created in a matter of 4 to 5 months, their profit is just a drop in the bucket.

Wealth and Income Example for Rental Properties

Maybe you want to invest in rental properties also. There is a process out there called BRRRR, which stands for Buy, Rehab, Rent, Refinance, Repeat. These rentals are properties that you intend on keeping in your rental portfolio long term. They can not only create wealth, but will build equity and acquire a monthly income. You can get started by finding a property from a wholesaler or real estate agent that is a good deal. It may need some work, but real estate investing is all about finding undervalued properties and turning them into profitable investments.

Numbers break down:

ARV = $200,000 at 70% means that you are all in at $140,000

All in total $140,000 Purchase price and Rehab budget (normally less for rentals)

Refinance break down:

Refinance at 75% of $200,000 ARV  = $150,000 (what you owe)

Equity created = $50,000 net worth

There are some closing costs for both loans 

It’s all about getting into the right debt on the right properties. From purchasing the property to fixing it up, all of these expenses can be paid using other people’s money, a hard money lender, or even a private lender. Now it is time to use another form of debt. This is long term debt, such as a traditional loan, DSCR, or whatever loan is going to work best for your needs. If this is done correctly, you can then refinance everything including closing costs and payments, up to 75% or even 80% depending on the products that you use. 

In conclusion

All you need to get rich is a clear understanding of how using other people’s money can create wealth and income. Nowadays, we see more credit card debt and bad debt that is greatly impacting people’s ability to get rich. As real estate investors, we need to turn to more asset based debt, in order to create the lifestyle, income, and wealth that we want.

Watch our most recent video to find out more about how good debt can make real estate investors rich.

If you have a good deal at 70% or below the ARV, you can reach out to us! We would be happy to talk to you about your investments, provide a fix and flip loan, and help you find OPM.

Hard Money Loan Requirements Explained

Understanding hard money loan requirements is the first step in finding the right lender for you!

Before you get started on your fix and flip, you need to know a few things:

What does your lender look for? 

What do you need to know about each project before applying for a hard money loan? 

The more you know, the better deal you’ll be able to find.

What Do Hard Money Lenders Look For?

Lenders look at a lot of things when determining deals. It’s important to have details for each piece of your project so you can make sure there aren’t any delays in your work.


ARV (After Repair Value) is a critical component when calculating a hard money loan. 

Hard money lenders look at the projected value of your property. By looking at comparable properties (comps), lenders estimate the projected value based on the work you plan to complete. 

Scope of Work and Budget

Similarly, lenders look at the scope of the work you plan to put into your project.

What renovations are you planning? What is your budget? Having clear answers to these questions helps the lender determine what exactly you’re going to need to put into the project in order to have a higher ARV.

Your lender will also look at the purpose of the project. What is your ultimate goal? This lets lenders estimate the profits and the LTVs when you’re figuring out a deal.

Exit Strategy

You need to have an exit strategy. Are you selling, refinancing, something else? 

Having a clear exit strategy demonstrates your ability to manage the project well and follow through with generating returns.

Specific Loan Amounts

How much are you looking to borrow? Do you want the full amount or just partial? 

If you can put some of your own money into the project, you’ll need a clear idea of how much of that goes towards the purchase price vs. renovation costs. 

Since timing is so important in keeping your project moving, you want to know upfront if you’re putting your own money in escrow for repairs or relying on hard money loans for those costs.


How long is your project going to take? The longer the project takes, the more important it is to buy lower to ensure you’re able to have higher profit margins so you can pay back your loan. 

Interest, taxes, insurance, and even HOA fees add up every month you hold your loan and work on your project. 

The faster you can turn your project into something that is making you money, the less risky you are as a borrower.

Hard Money Loans: Profit Expectations

Ultimately, estimating profit revolves around three things:

  • ARV (After Repair Value)
  • Purchase Price
  • Renovation Costs

Lenders typically max out at 70% to 75% of the ARV, but LTVs (Loan to Value) can also affect those numbers.

If you estimate your ARV early on, you can calculate what money you have to put into the project before sending it to lenders. This lets you propose a more detailed plan which can help you find a better deal.

You can use this free tool to help you calculate those amounts quickly and easily. 

Does Your Project Meet the Requirements?

We want to make sure your project is profitable and able to meet hard money loan requirements. 

If you have a deal you want us to look at, we’re more than happy to help! You can always reach out to us at Info@HardMoneyMike.com.

You can also check out our YouTube channel for more information about how to successfully navigate your fix and flips.

Happy Investing.

Hard Money Loans for New Investors

Hard money loans open doors for newer, smaller investors who are looking for a way to enter the real estate game.

Our goal is to make it as easy as possible for new investors to find the right information so they can be successful.

What are hard money loans? 

Hard money loans are short-term asset-based loans secured by real estate. These loans are typically provided by private investors, small companies or individuals in your local area. 

The main advantage of hard money is they provide quick real estate financing based mostly on the asset and not on your credit score. 

Hard money loans can be used for many things:

  • Funding a fix-and-flip
  • Financing the front-end of a BRRRR project
  • Overcoming credit limitations often experienced by new investors
  • Purchasing land for development
  • Funding some construction projects

Pros of Hard Money Loans:

1. Speed

Whereas Wall Street companies or banks may take two to four weeks, getting approved for a hard money loan typically takes five to seven days.

Speed is critical in investing, and quickly getting your money upfront is crucial in the real estate game.

2. Upfront Financing

Hard money loans also give you money upfront. This allows you to get your escrows out to start the project. Most large companies want you to put money in first. This can be a particular problem for new investors, and hard money lets them get their foot in the door. 

3. Flexibility

Large companies often have very strict lending criteria. If your project is unique, if it’s outside of the box, hard money lenders are more likely to consider it.

4. Higher Financed Amounts 

If you find a deal that has a good loan-to-value ratio, hard money lenders may lend up to 100% of the financing. This lets you keep more of your own money in your pocket and use the lender’s funds for your project.

5. Property-Focused Approvals

Finally, approvals for hard money loans are mainly based on the property itself, the exit strategy and the planned renovations or improvements. Hard money is often a good fit if you’re an investor with limited credit history or a unique property or area.

Cons of Hard Money Loans

1. Higher Costs

While interest rates on hard money are typically similar to other lenders, costs can be anywhere from 1% to 1.5% higher. However, faster closing times often offset the higher cost and can get you better deals than Wall Street companies.

2. Shorter Terms

Typically, hard money lenders offer financing ranging from six to twelve months. Therefore, if you’re looking for something longer than twelve months, Wall Street companies or a local bank may be a better fit. 

3. Limited Availability of Hard Money

Additionally, it’s important to remember that most hard money lenders are individuals, small companies, or private institutions. These lenders only have a finite amount of money to lend. It’s often necessary to build good relationships with local hard money lenders to ensure access to funds.

Hard Money Resources for New Investors

It can be tricky to determine what option is best for you. Because of this, we’ve compiled some resources to help you shop around for the right fit for your project.

Sites like Connected Investors help you network with other people in the business. Get plugged in with your local realtors, wholesalers, and lenders. Talk to other people in the industry to make sure you’re getting the best deals. 

To help you shop around, we also have a great tool called the Loan Cost Optimizer that helps you find the good lenders. It’s free to download and to use!

If you’re still not sure if hard money loans are right for you, no problem! Check out the Cash Flow Company website or YouTube channel to learn about other, more Wall Street-style options that have the same personal connections as hard money loans. 

Additional Questions and Research

Hard money is a very important tool, especially for new, small investors. However, you should always shop around, look around and talk to other experts so you know your options. Also, experts can help you better understand the terms and conditions of hard money loans so you know exactly what you’re getting into.

If you have questions about hard money loans, contact us and we’ll be happy to help you out!

Additionally, you can check out this video on our YouTube channel.

How Escrow Funds Can Finance Your Project’s Rehab

What are escrow funds and how can you use them to get ahead of the game?

If you’re looking to finance property fixes, understanding how to leverage escrow funds effectively can make a huge difference in the success of your real estate investment endeavors.

What Are Escrow Funds?

Escrow funds are the funds set aside by lenders specifically for the repair or renovation of a property. 

Lenders can give up to 100% of the total repair cost. This escrow fund slowly repays you as you work on renovations. The only catch is that you need to put down the first 10-20% on the purchase price and begin the project before receiving reimbursement.

Securing and Using Your Funds

The best part about escrow funds is that they can fund up to 100% of the project. But how and when do you access those funds?

Each time you finish a portion of the work, you must submit a draw request. This involves providing documentation (such as photographs or on-site inspections) of the completed work. You’ll also need to submit invoices and proof of payment for the contractors involved. 

Once the lender has evaluated the progress, they release the escrow funds to you.

Potential Challenges with Escrow Funds

One common issue is that many investors lack the necessary upfront funds to kickstart the project and cover initial expenses. 

Starting a project often requires ordering materials, making down payments to suppliers, and coordinating various tasks, all of which can deplete your available funds. However, escrow funds aren’t reimbursed until the work is completed, creating a potential cash flow problem.

To fix this, it’s best if you have at least 20 to 30% of the funds for the repairs in your own pocket or, as we call it, in your own money bucket. 

This buffer allows you to begin the project without only relying on escrow funds. That way, by the time you’ve finished the first project and can do the first draw, you can freely move onto the second draw.

Keeping your project moving forward is critical in a quickly moving market.

How to Put Money in Your Bucket

Escrow funds are great, but they don’t give you the money upfront. In order to begin a project, where can you get the initial finances to fund the initial payments?

  • Credit Cards: Business credit cards are excellent to get projects started. 0% credit cards are even better to buy the materials that you need to pre-order. 
  • Paying Contractors Directly: If you don’t know how to do that, just email us and we’ll let you know how. It’s even better if you can pay vendors with your business credit cards.
  • Get lines of credit and E-locks on properties.
  • Loans from Family and Friends: You can often find family or friends who are willing to invest in your project. They’re going to get a good return on their investment, and your project gets the initial funding it needs.
  • Loans from Private Lenders: Companies like Hard Money Mike are sometimes willing to provide up to 100% in escrow funds. Look for private lenders who provide flexible financing solutions that help keep your projects from stalling.

How We Can Help

By collaborating with lenders like us who understand the unique needs of real estate investors, you can ensure a smoother experience and avoid unnecessary delays that may result in higher costs.

If you have questions about escrow funds, contact us and we’ll be happy to help you out!

You can check out this video on our YouTube channel.

70 Percent ARV: Why Can’t I Get More for My Real Estate Deal?

The real reason your fix and flip lender won’t give you more than 70% ARV…

One thing new investors ask all the time:

Why do lenders only lend 70 or 75%?

Let’s go over the numbers and see how lenders come up with that 70% number.

What Is ARV and the 70% Rule?

The number we’re talking about is what percentage of the after-repair value (ARV) a lender will give you.

The ARV is what you can sell a property for after flipping, or what it can be appraised for on a refinance for a BRRRR rental.

Here’s an example of what a 70% ARV might look like:

You buy a property. The market shows it will sell for $200k after it’s fixed up. If your lender offers 70% of the ARV, that’s the maximum amount your loan could be. In this case, 70% of $200k is $140k. So you can get up to $140,000 as a loan when you buy this property.

So that’s $60k worth of value that’s not being covered. This is where investors ask the question… There’s still a lot of money here. Why can’t I borrow against that extra $60,000?

Let’s dive into why lenders stop at 70%.

Why Do Lenders Stop at 70% ARV?

If lenders stop at 70% of the ARV, what happens to the remaining 30%?


First, is profit for you. Why do you invest in real estate? Because you want to make a profit. And if you don’t factor in profit at the beginning of your deal, there’s not going to be any leftover for you.

So as lenders, we build in a 10-15% profit margin for you. Let’s say on average, it’s 12.5%. That amount comes from the 30% of the ARV not covered by your loan. 

In our example $200k property from earlier, 12.5% is $25,000, which will be profit for you at the end of the project.


There are a few other people involved in this process, especially on the selling side.

When you bring in a realtor, you can expect to say anywhere between 4.8% and 6%. To keep it easy, we usually estimate 5%.

So of your ARV, we’ve already taken up 17.5% between your profit and your realtor.

Closing Costs, Cost of Funds, and More with a 70% ARV

Closing costs vary, but it’s safe to assume they will cost 1.5%.

With all the costs so far, we could be looking at anywhere between 17% and 22%, but an average of 19% total.

After you’ve purchased the property and started fixing it up, there will be more costs. Two major areas that should be factored into your budget are interest on your loan and a general overage budget.

Between these extra costs, we’re sitting at an average of 29%…

Which is exactly why lenders leave 30% of the ARV off of the loan they give you.

Making Sense of a 70% ARV

With real estate investing, the money’s in the money. Understanding and feeling comfortable with the numbers is the fastest way to start getting into great deals.

You don’t want to get into a deal that won’t be profitable for you. If you won’t get at least 10-15% profit, why do it? Your lender should leave space for your profit and other costs that come up.

Have questions or a deal where you need help with the numbers? Contact us at Info@HardMoneyMike.com, and we’d love to see how we can help.

You can also get more resources about real estate investing on our YouTube channel.

Happy Investing.

Home Run

From start to finish, Evan really hit a home run with this one. Evan, one of our most esteemed sluggers when it comes to fixing up homes, saw this house and was immediately determined to get it out of the bush leagues and into the Big Leagues.


The people selling the house had really let it fall to pieces, and the purchase price was set at $169,000, which was below market at the time. There was some interest, but because of how much work needed to be put into the home, Evan came out on top with the bases loaded.

Rounding First

Evan had to start at the bottom with the foundation. There were cracks in the concrete throughout the home, which hadn’t reached the walls yet, but would have if left much longer. He dug tunnels under the home to access the support beams, then placed foundation repair pilings under each major beam. He lifted the home to the correct level, installed support cylinders under the beams, and shimmed them to the proper height.

Rounding Second

Next, he moved on to the floors and walls. The entire house needed new floors, including carpet, hard wood, and laminate. For both the floors and the walls, he kept his color theme neutral and went with grays and browns throughout the home, so as to make the home able to flow with any interior design that the eventual new homeowners would want.

Rounding Third

As he was nearing home base at this point, he had some last-minute touchups that were in desperate need. The kitchen needed new cabinets and countertops, and the bathrooms needed new countertops and sinks. He also spruced up the landscaping around the home to really make the house look sharp from the outside in.

Bring it Home

Evan really was the “cleanup batter” for this house. The bases were loaded – the house needed a lot of work. And with a full count staring him down.. BOOM! A dinger! A bomb! A Moonshot! He slammed it out of the park and brought it home strong. He ended up selling the property for $299,900 to a very eager couple excited to grow their family in that house. Nothing better than a Grand Slam to help bring this house into the Bigs.


Do You Need a Hard Money Loan?

With hard money loans, it’s very important to shop around. Every hard money lender will offer a slightly different type of loan, with slightly different requirements.

There is a loan that is perfect for your credit, your plan, and your property. You just have to find it.

Contact us for a Hard Money Loan

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Hard Money Mike funds loans in Colorado, Oklahoma, and Texas.