Tag Archive for: #Hard Money Mike

9 Questions to Ask Before You Commit to a Hard Money Loan

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Today we are going to share the 9 questions to ask before you commit to a hard money loan.Yes, cost matters. However, cost is not the only thing that matters. Before you commit to a hard money loan, you need to look at the full picture. Funding is half of real estate investing. After all, you need money to make money. So let’s walk through nine smart questions to ask before you sign anything.

1. Can They Actually Close and Fund On Time?

First and most important, can they close? Are you talking to a broker? Or are you talking to a direct lender? Either way, you must make sure the money is real and ready.

Because here’s the truth, if you get a property under contract and your lender fails to fund, you damage your reputation.

For example, imagine you lock up a deal from a wholesaler. Then closing day comes. Your lender delays two weeks. That wholesaler will likely stop sending you deals.

Therefore, verify funding.

  • Ask for referrals

  • Ask who controls the money

  • Ask how long they typically take to close

In this business, speed matters. So make sure they can perform.

2. Will They Fund the Full Amount You Need?

Next, will they fund enough to make the deal work?

You need to cover:

  • Purchase price

  • Rehab budget

  • Closing costs

  • Possibly payments

If the lender only funds part of it, do you have the rest?

For example, let’s say the lender funds 85% of purchase and 80% of rehab. However, you don’t have the extra cash. Now you’re short. As a result, your project slows down. And when projects slow down, costs rise.

So instead, make sure the deal is funded from start to finish. From close to close.

3. Does the Pricing Match Your Timeline?

Every deal has a timeline. Some flips take 2 months. Others take 9 to 12 months. Therefore, pricing must match your plan.

Sometimes it makes sense to pay more points and get a lower interest rate. Other times, it makes sense to pay fewer points and accept a slightly higher rate.

For example:

  • Lender A: 3 points, 12-month term

  • Lender B: 1.5 points, 6-month term

At first glance, Lender B looks cheaper. However, if your project runs 8 months, you may pay another 1.5 points. Now it costs more. So always match the loan to the project.

4. What Is the Real Interest Rate?

Now let’s talk about interest.

Ask these questions:

  • What is the note rate?

  • Is there a minimum interest period (3–6 months)?

  • Do they charge interest on unused rehab funds?

  • What is the default rate?

Because here’s the problem. Some loans require you to keep the loan for 3 months minimum. Even if you sell in 30 days, you still pay 3 months of interest. Also, default rates can jump high fast. So before you sign, understand every detail about the interest. Clarity now prevents stress later.

5. How Many Points Are They Charging?

Points are simply a percentage of the loan.

For example:

If your loan is $200,000
And they charge 2 points
That equals $4,000 upfront

Now, lower points often look better. However, points must be viewed alongside term length. If one lender charges 3 points but gives you 18 months, that may work. Meanwhile, another lender may charge 1 point but only give you 6 months. So again, match the structure to your project.

6. What Other Fees Are Involved?

Points and interest are obvious. However, fees often hide in the fine print.

Common fees include:

  • Underwriting fees

  • Processing fees

  • Doc fees

  • Legal fees

  • Appraisal fees

  • Draw fees

  • Inspection fees

  • Wire fees

At closing, you must add all of this together. That total is your true cost of money.

For example, one lender may advertise lower points. However, they charge five extra fees. Meanwhile, another lender charges slightly higher points but almost no extra fees.

So always calculate the full cost.

7. What Are Their Lending Limits?

Next, what will they actually lend?

Ask:

  • What percentage of purchase? (70%, 80%, 90%?)

  • What percentage of rehab? (80%, 100%?)

  • What LTV or ARV do they use?

Because not all deals are the same.

For example, maybe you’re doing a pop-top addition. Or maybe you’re adding square footage. Some lenders dislike those projects. Others welcome them.

Therefore, make sure the limits fit your deal. The right lender for one project may not be right for another.

8. What Experience Do They Require?

Experience matters — especially with larger institutional lenders.

Many lenders want:

  • 2–5 flips in the last 3 years

If you don’t have that, they may lower your leverage. Or worse, they may deny the deal. However, many true hard money lenders care more about the deal itself.

For example, a contractor moving into flipping may qualify. A realtor who understands value may qualify.

So ask upfront:

  • What experience do you require?

  • What proof do you need?

That way, you avoid surprises.

9. How Does My Credit Score Affect Terms?

Finally, understand how your credit score impacts the loan.

Large lenders often reward high scores with:

  • Higher LTV

  • Lower rates

  • Lower points

For example:

A 740 credit score may get 90% purchase and 100% rehab.
A 620 score may get 80% and 80%.

True hard money lenders usually focus less on score and more on the deal. However, they still want to see responsible behavior. If you use credit cards heavily but pay on time, many understand that. After all, investors use credit as part of the business. Still, ask how your score changes your terms. Because better terms mean more profit.

Final Thoughts: Funding Is Half the Game

Hard money loans can be powerful. They can help you move fast. They can help you secure strong deals. However, the wrong loan can eat your profit.

So before you commit:

  1. Make sure they can close on time.

  2. Make sure they fund the full amount.

  3. Match pricing to timeline.

  4. Understand interest.

  5. Review points.

  6. Calculate all fees.

  7. Confirm lending limits.

  8. Clarify experience requirements.

  9. Know how credit affects terms.

Then, and only then, move forward. Because when you get your money right, your project runs smoother. And when your project runs smoother, your profits grow. Run your numbers. Compare lenders. Use tools that show you the full cost.

Good investing starts with smart funding.

 Watch our most recent video today on: 9 questions to ask before you commit to a hard money loan

3 REAL Ways to Get 100% Financing in Real Estate

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Today we are going to discuss the 3 REAL Ways to Get 100% Financing in Real Estate.

Most new investors think they need all cash to buy real estate. However, that is not true.

Today, smart investors often use 100% financing. In fact, when you add closing costs, payments, and surprises, deals often need closer to 120% funding.

Because besides the purchase and rehab, you also pay for:

  • Closing costs

  • Carry costs (monthly payments, utilities, taxes)

  • Repair overruns

  • Escrow and reserve funding

  • Contractor timing gaps

So, the real question becomes:

Where does the extra money come from?

Let’s walk through the three real-world ways investors actually do this every day.

First: Use a HELOC (Home Equity Line of Credit)

A HELOC is the most common tool investors use to reach 100% financing.

Because once it is open, money sits ready for you to use.

So, instead of asking a lender for more money every time something changes, you simply transfer funds when needed.

Why investors love HELOCs

  • Money is ready anytime

  • No approval needed per deal

  • Usually lower rates than flip loans

  • No new closing costs each time

  • You reuse it again and again

Most HELOCs stay open for about 10 years, so investors use the same line on many deals.

Example

For example, one investor needed about $85,000 beyond her lender’s loan.

So she used:

  • Cash savings

  • Plus $55,000 from her HELOC

Because of that, she covered closing costs, overruns, and reserves without slowing down the project.

And speed matters. Therefore, having funds ready helps deals move fast.

Second: Business Lines of Credit

Next, we look at business lines of credit.

These work like HELOCs, however they do not require home equity.

So, investors use them when they:

  • Rent their home

  • Have limited equity

  • Want extra backup funding

Why they help

  • Money sits ready when needed

  • No property tied up

  • Funds recycle as you repay

  • Easy transfers once approved

Rates usually run higher than HELOCs. However, investors still use them because the money stays flexible.

Example

For instance, a small investor opened a $40,000 business credit line.

Later, when a rehab ran over budget, he paid contractors immediately instead of waiting on lender approvals.

So, the project stayed on schedule.

And again, speed wins in real estate.

Third: Private Money

Finally, we reach the most powerful tool: private money.

Private money means borrowing from individuals instead of banks.

These lenders simply want:

  • Better returns than savings accounts

  • Safer investments than stocks

  • Steady income from real estate loans

Meanwhile, investors get flexible funding.

Why private money works

  • No bank approval delays

  • Flexible deal terms

  • Faster funding

  • Less focus on credit score

  • Relationship-based lending

Because once trust builds, deals fund faster.

Example

For example, many investors meet lenders at:

  • Real estate meetups

  • Investment clubs

  • Networking events

Half the room usually wants deals. Meanwhile, the other half wants better returns on their money.

So, investors connect the two sides.

And both win.

Build Your Funding Stack

Successful investors rarely rely on just one tool.

Instead, they build a funding stack, including:

  • HELOC funds

  • Business credit lines

  • Private lenders

So, when deals appear, money already waits.

Meanwhile, investors who scramble for funding often miss good deals.

Action Steps You Can Take Now

Therefore, if you want 100% financing, start here:

Step 1 — Improve Your Credit

Higher scores unlock better HELOC and credit lines.

Step 2 — Talk to Local Banks & Credit Unions

Many offer HELOC and business credit options.

Step 3 — Attend Investor Meetups

Private lenders often wait in those rooms.

Step 4 — Plan Before You Buy

Smart investors line up money first.

Then they shop for deals.

Final Thought

Real estate investing moves fast.

However, investors win when they control funding, not when funding controls them.

So start building your funding stack now.

Because when the right deal shows up, you want money ready at your fingertips.

And that is how investors truly reach 100% financing in real estate.

Watch our most recent video to find out more about: 3 REAL Ways to Get 100% Financing in Real Estate

How to Get the Best Rates for a Hard Money Loan

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Today we are going to discuss how to get the best rates for a hard money loan! Let’s talk about the truth about hard money rates. More importantly, let’s talk about how you can save real money on them.

After all, many investors wonder why two people send in the same deal, yet one gets better rates, better terms, and faster closings. The good news is this isn’t luck. Instead, it’s about preparation, fit, and presentation.

Let’s break it down step by step.

Why Hard Money Rates Are All Over the Place

First of all, hard money is not a bank loan.

Because of that, rates do not come from one big Wall Street rulebook. Instead, every lender sets their own guidelines. As a result, you may see one lender offer 9.5% while another offers 13.5% on the same deal.

At the same time, one lender may cap you at 70% LTV, while another offers 75% of ARV.

However, here’s the key point: most of the pricing comes down to you and your deal.

So yes, shopping around matters. Even more important, learning how to attract better terms matters even more.

Understand This First: Hard Money Is a Segmented Market

Before anything else, you need to know this:
Every hard money lender has their own bucket of money.

Because of that:

  • Each lender has different rules

  • Each lender wants different types of deals

  • Each lender tightens up when their money runs low

So, when one lender pulls back, another may still be aggressive. That’s why understanding the market helps you land better terms faster.

The 4 Biggest Mistakes That Drive Up Your Rates

Now, let’s look at the mistakes that quietly cost investors thousands.

1. Not Having Your Numbers Ready

First and foremost, lenders want to know you understand your deal frontwards and backwards.

So before you submit anything, make sure you know:

  • Purchase price

  • ARV

  • Scope of work

  • Rehab budget

  • Timeline

For example, when you clearly explain your numbers, you signal confidence. Because of that, lenders often move faster and sharpen their terms. On the other hand, when numbers feel fuzzy, your deal often drops to the bottom of the pile.

Preparation matters.

2. Not Showing Enough Liquidity

Next, liquidity plays a big role in hard money underwriting.

Why? Because lenders want to know:

  • You can make payments

  • You can handle surprises

  • You won’t stall the project

For instance, if an unexpected repair pops up, liquidity keeps the project moving. As a result, lenders feel safer, which often leads to better pricing.

3. Missing the Mark on ARV

Just as important, your ARV must be spot-on.

That means:

  • Using nearby comps

  • Matching square footage

  • Matching beds, baths, and garages

  • Staying in the same property type

Remember, appraisers follow national standards. So if your comps stretch too far, your deal weakens. However, when your ARV makes sense, lenders gain confidence. And when you buy right, you can fix almost anything that comes later.

4. Not Knowing the Lender’s Sweet Spot

Finally, many investors send good deals to the wrong lender.

Some lenders prefer:

  • Small commercial

  • Condos

  • Rural properties

  • City-center homes

  • Small loan sizes

  • Large loan sizes

So before you submit, ask yourself: Does this deal match what this lender likes?
When it does, rates and terms often improve. When it doesn’t, pricing usually gets worse, or the deal gets declined.

How Hard Money Lenders Actually Price Deals

Now let’s talk about how lenders really think.

In simple terms, pricing depends on:

  • Your experience

  • The deal fit

  • Available capital

  • Loan size

  • Clean documentation

For example, when lenders have extra money to place, pricing often improves. Meanwhile, when money is tight, lenders get picky.

Most importantly, lenders focus on math—not emotion. They want:

  • Interest paid on time

  • Clean exits

  • Fast turnover to the next deal

So the easier you make that process, the better your leverage becomes.

Rates, LTV, and How to Lower Your Costs

Here’s another powerful lever: loan-to-value.

When you reduce lender risk, rates usually drop.

For instance:

  • Putting in 10–25% down often improves terms

  • Covering repairs yourself can lower rates

  • Using outside funds reduces points and interest

At the same time, tools like HELOCs or 0% credit cards can lower your blended cost. For example, borrowing repairs at 7.5% with no points often beats paying 10–12% plus points through hard money.

So always ask lenders:

  • What happens at 10% down?

  • What happens at 20% down?

  • What if I cover the rehab?

Then compare the total cost. Small changes add up fast.

Hard Money vs Banks: Know the Difference

Of course, banks offer lower rates. However, they also require:

  • Tax returns

  • Work history

  • Long approval timelines

In contrast, hard money costs more on paper but offers:

  • Faster closings

  • Higher LTVs

  • Flexible property types

  • Creative structures

Because of that, hard money can actually save you money when speed, flexibility, or deal certainty matters.

How to Get the Best Deal Every Time

To wrap this up, getting the best hard money rates comes down to this:

  • Know your numbers

  • Match the right lender

  • Reduce risk where possible

  • Present a clean, clear deal

When lenders see a solid plan, they respond with better terms.

And finally, if you want help comparing options, use a Loan Cost Optimizer. It lets you compare multiple scenarios side by side, so you can see the true cost of each option.

Because in the end, every deal is different. And the investor who compares wins.

Bottom line:

Shop every deal. Prepare every file. And always know your numbers. That’s how you stay on the fast track and keep more money in your pocket.

Watch our most recent video to find out more about: How to Get the Best Rates for a Hard Money Loan

Download our free Loan Optimizer, to see which loan option is best for you!

How To Comp Properties in a Declining Market

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Today we are going to discuss how to comp properties in a declining market. When the market shifts, your strategy needs to shift too. In a flat or declining market, you can’t just rely on sales from the past six months anymore. Instead, start by looking at what’s on the market right now. Those active listings are your real competition, and they’ll shape what your property will be worth when it’s time to sell or refinance.

Look for Real-Time Clues

For example, if most listings in your area are dropping prices or offering incentives like paying closing costs, that’s a sign values are sliding. You’ll want to factor that in before you buy. Also, make sure your comps match your property closely, same subdivision, similar size, beds, baths, and updates. Even a home one street over could be in a different neighborhood with higher values.

Use Fresh Data and Plan Ahead

Another key tip is to focus on fresh data. Use comps that are no more than three months old, and better yet, study what’s currently listed. Then, run your numbers 5–10% lower to prepare for possible price drops before your project finishes.

For instance, a property valued at $300,000 today might only sell for $270,000 in a few months if the market dips. Planning for that now helps protect your profits later.

Be Competitive in a Buyer’s Market

Finally, take note of price per square foot and the condition of nearby homes. In a buyer’s market, you need to stand out by offering equal or better value.

The Bottom Line

In short, stay flexible, pay attention to trends, and always use the newest data. That’s how you’ll keep clarity, certainty, and profit in a shifting market.

Watch our most recent video today to find out more about: How to comp properties in a declining market.

Need help running your numbers? Contact us today!

Are Hard Money Loans Still Worth It in 2025?

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Today we are going to answer the question, “are hard money loans still worth it in 2025?” Let’s get back to the basics. What is a hard money loan, and why are investors still using it in 2025? Over the past few years, new lenders and Wall Street money have entered the space, creating some confusion. But true hard money lending is still here—and it continues to be one of the most powerful tools for real estate investors who need speed and flexibility.

Fast Alternative to Banks

Banks can feel like a slow-moving ship. Yes, they’ll get you there, but it can take 15 to 45 days to close a loan. Hard money loans, on the other hand, move fast, like a speedboat.

Because they’re asset-based, hard money lenders focus on the property more than your personal income or credit score. That’s what makes them so appealing. You can close quickly, often in just a few days, and grab good deals before anyone else.

Example:
One investor needed to close in two days. The property had title work and insurance ready. While another buyer waited 30 days for their bank loan, this investor closed fast and won the deal. That’s the power of hard money.

What Properties Qualify?

Hard money lenders focus on real estate that makes business sense. That means:

  • Fix and flips

  • Fix and rentals (like BRRRR properties)

  • Commercial properties

  • Non-owner-occupied real estate

If the deal makes sense and the asset protects the lender, it usually qualifies. These loans are not for primary homes or owner-occupied properties.

How Fast Can You Close?

Speed is one of the biggest advantages. Once the title and insurance are ready, many hard money loans close within a couple of days. Because investors often compete with cash buyers, that speed can make all the difference.

What Do Hard Money Loans Cost?

Hard money isn’t free, but it’s fast and flexible. Here’s what you can expect:

  • Rates: 10% to 14% (simple interest)

  • Points: 1 to 3% of the loan amount

  • Fees: Usually small, such as legal or doc fees ($500–$1,500)

You should never pay application or draw fees on a true hard money loan.

Repayment Terms

These are short-term bridge loans, typically lasting 6 to 18 months. Most don’t have prepayment penalties. So, if you pay it off in three months instead of six, you won’t get hit with extra fees. That flexibility gives you room to adjust your strategy and refinance when the time is right.

Does Credit Matter?

Yes and no. Hard money lenders don’t care about your credit score, but they do care about your credit history. They want to see that you pay your lenders on time. A quick background check will also show if you have liens or judgments that could cause issues at closing.

Think of it this way: credit scores don’t matter, but credit habits do.

How Much Can You Borrow?

That depends on the lender. Some use Loan-to-Value (LTV), while others use After Repair Value (ARV).

LTV lenders base the loan on what the property is worth today. ARV lenders look at what the property will be worth after improvements. Because of that, ARV lenders usually lend more and often cover part, or even all, of your rehab costs.

Example:
One investor bought a property for $155,000 and planned a $50,000 rehab. The ARV was $300,000. The lender covered 100% of the purchase and rehab costs. The investor only needed to cover closing costs. That’s the kind of leverage ARV lending makes possible.

How Do Draws Work?

Most lenders give a small amount upfront—usually 10% to 20% of the rehab budget, to get started. After that, funds are released in draws as the project moves forward.

To get a draw, you’ll submit receipts and photos showing completed work. Many lenders now use virtual inspections that take only 5–10 minutes. Once approved, funds are released within a couple of days.

Example:
An investor received $15,000 upfront for demo work. After submitting photos and invoices, a five-minute virtual inspection confirmed progress. The draw was funded within 48 hours. That’s how fast modern hard money lending works.

Red Flags to Watch For

Be cautious of anyone charging application fees or upfront money just to “see if you qualify.” That’s a big red flag. Most reputable lenders don’t charge these fees.

If a lender wants money before reviewing your project, walk away. Chances are, you’re paying for something you’ll never get.

The Application Process

Getting approved for hard money usually happens in two stages:

  1. You, the borrower – This includes a background and credit review, plus proof of funds for your portion of the project.

  2. The property or deal – Lenders look at your scope of work, exit strategy, and overall plan.

If both make sense, you’re good to go. Remember, hard money lenders want good deals—for both you and them.

Final Thoughts: Still Worth It in 2025?

Absolutely. Hard money loans remain one of the best tools for real estate investors who need speed, flexibility, and funding based on the property, not their personal finances.

They’re not for every situation, but when you find a great deal that needs quick action, hard money can help you win it.

Ready to Get Funded?

If you’re looking for a hard money loan, send us your deal and we’ll review it. Whether it’s your first project or your fiftieth, we’ll help you see if it makes sense, and get you funded fast.

Watch our most recent video to find out more about: Are Hard Money Loans Still Worth It in 2025?

SOS! Stuck in a Fix & Flip—Here’s How to Get Out

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SOS! Stuck in a Fix & Flip—Here’s How to Get Out

Today we are going to discuss SOS! Stuck in a Fix & Flip! Flipping houses can feel exciting—until it doesn’t. Sometimes a property just won’t sell for what you need. Stress builds. Bills pile up. And you start asking, what now?

The good news? You still have options. Let’s look at three ways to pivot and move forward.

1. Update It: Bring the Property Up to Market Standards

Buyers today want move-in ready homes. If your property looks unfinished or dated, they’ll move on to the next one.

Ask yourself:

  • Does the home need a new roof?

  • Are the floors worn out?

  • Could a kitchen or bathroom upgrade seal the deal?

  • Is the yard still bare or messy?

👉 Example: If your flip looks great inside but the landscaping is dirt and weeds, buyers might skip it. Spending a little more to finish the yard could push it to the top of the list.

When the market has plenty of choices, your property needs to shine brighter than the rest.

2. Bridge It: Buy More Time with a Short-Term Loan

Sometimes the problem isn’t the property—it’s the timing.

That’s where a bridge loan comes in. It can carry you from your current fix-and-flip loan into the next selling season. Most bridge loans last one to two years.

Before you bridge, check your burn rate:

  • Monthly loan payments

  • Taxes

  • Insurance

  • Utilities

👉 Example: If your property costs $3,000 a month to hold but you still have $50,000 in potential profit, bridging for six months could make sense—especially if rates drop or the market heats up.

But if your margins are too thin, it may be smarter to sell now, take a small hit, and move on. Sometimes limiting your loss is the best business move.

3. Turn It: From Flip to Rental

If selling isn’t working, consider turning the property into a rental.

Options include:

  • DSCR loan (Debt Service Coverage Ratio loan): Approval is based on rental income, not your personal income.

  • Conventional loan or bank loan: Great if you qualify and want long-term stability.

  • Short-term or mid-term rentals: Could generate strong cash flow depending on the area.

⚠️ Watch your listing price! Lenders often use the lower of the appraisal or listing price. Dropping your list price too low can hurt your refinance options.

👉 Example: One investor kept cutting her list price to $250,000. But when she applied for a DSCR loan, the home appraised at $330,000. Because lenders had to use the lower number, she couldn’t get the funds she needed. Keeping her listing higher would have opened better options.

Turning a flip into a rental might even be the push you need to start building a long-term portfolio. Rentals bring cash flow, tax benefits, and future wealth.

The Bottom Line

Every stuck flip has a solution. The key is to:

  1. Know your numbers.

  2. Check your stress level.

  3. Decide whether to update, bridge, or turn.

Real estate is a business. Sometimes it’s about maximizing profit. Other times it’s about limiting loss and keeping momentum.

Need a Second Set of Eyes?

If you’re stuck, don’t stay frozen. A quick strategy session could help you see your best path forward—whether that’s finishing updates, bridging into the next season, or refinancing into a rental loan.

Let’s clear your mind, clear the deck, and get you moving on to your next deal.

Contact us today to find out more!

Watch our most recent video to learn about: SOS! Stuck in a Fix & Flip—Here’s How to Get Out

How Escrow Can Make or Break Your Fix & Flip Investment

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Why Escrow Matters

Today we are going to discuss how escrow can make or break your fix & flip investment. In a fix and flip, escrow can be your best friend—or the thing that slows your project to a crawl. When you understand how it works, you can keep your rehab moving fast, avoid costly delays, and protect your profits.

What Is Escrow in a Fix & Flip Loan?

Escrow is the money your lender sets aside for repairs.
It’s there to turn an undervalued property into a market-ready one.

Example:
If you buy a home for $150,000 and budget $40,000 for repairs, the lender might escrow that $40,000.

Lenders want to be sure that money goes to the agreed repairs, not something else. That’s why they hold it in escrow instead of handing it to you all at once.

What Escrow Usually Covers

Every lender is different, but escrow most often covers:

  • Repairs and rehab work from your approved budget

  • Certain agreed costs, like insurance or utilities (if negotiated before closing)

Tip: Always get a clear list from your lender before you close. If it’s not in writing, don’t count on it being covered.

What Escrow Usually Does NOT Cover

Escrow funds are not for:

  • Your monthly loan payments (except in rare cases)

  • Surprises or changes you decide to make mid-project

  • Closing costs

  • Ordering materials ahead of time (pre-orders) unless installed and inspected

Example:
If you decide halfway through to add a deck or upgrade all the windows—without it being in your original budget—you’ll likely need to pay for it yourself.

Why Lenders Use Escrow

Lenders lend based on the property being market-ready. Escrow ensures the repairs get done as planned.
They’ll release the funds only after they confirm the work is complete—sometimes with an inspection or permits.

How Escrow Works Step-by-Step

  1. You do the work. Pay contractors or buy materials.

  2. You submit proof. Bills, permits, or inspection sign-offs go to the lender.

  3. They approve. The lender verifies the work is done.

  4. You get reimbursed. The money goes to you or directly to your contractor.

Note: Some lenders release 10–20% of escrow at closing, but most wait until work is verified.

The Role of Speed in Your Profits

Speed is everything in flipping. The faster you finish, the fewer payments you make, and the sooner you can sell.

Example:
If you finish in 3 months instead of 6, that’s 3 months of payments saved and extra time to start your next flip.

Surprises and Overruns

They happen—old wiring, bad joists, price jumps on materials.
If it’s not in your budget, you’ll need to cover it.

Pro Tip: Build a 20% cushion into your budget.
For a $200,000 purchase + rehab, that’s $40,000 in extra available funds.

This covers:

  • Loan payments during the project

  • Pre-orders for materials

  • Overruns and surprises

Without it, you risk delays while hunting for extra cash—turning a 3-month flip into 6 months or more.

One Step Before You Start Investing

Have your available funds ready before you buy. This might mean:

  • A line of credit

  • A HELOC

  • Business credit cards

  • A partner

  • Private money

Final Word: Treat It Like a Business

Escrow protects the lender, but your job is to protect your timeline and profits.
Know what’s covered, plan for what’s not, and have your extra funds ready.

Ready to make your next flip easier and more profitable?
Let’s talk about how to set up your funding so you can move fast and keep more money in your pocket. Contact us today to get started.

Watch our most recent video about: How Escrow Can Make or Break Your Fix & Flip Investment

💰 Want 100% financing, 100% of the time? Get a copy of my book, Money Buckets: The Millionaire’s Secret to Fix and Flipping: https://tcfcoach.kartra.com/portals/ThvALQYZJB9c 💰 Get my online course, 100% Financing, 100% of the Time: https://TCFCoach.kartra.com/page/pdx2086 💰 Download all our FREE real estate investing tools: https://hardmoneymike.com/investor-tools/

Stop Confusing These Loans! Fix and Flip vs Hard Money Explained

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Stop confusing these loans! Fix and flip vs hard money explained! Are you a real estate investor wondering which loan to use? Maybe you’ve heard of fix and flip loans and hard money loans, but you’re not quite sure which one is right for your next deal.

Let’s break it down. These two loans may seem similar, but they are not the same. Understanding the difference can save you time, stress, and thousands of dollars.

What Is a Fix and Flip Loan?

A fix and flip loan comes from big lending companies—usually backed by Wall Street money. These lenders include names like Kiavi, RCN, and Lima One.

They work well if:

  • You have good credit (typically 680+)

  • You have money for down payments and reserves

  • You’re buying a standard single-family home

  • Your deal fits in their box

Here’s What “Their Box” Means:

Fix and flip lenders want:

  • Properties in clean neighborhoods

  • Homes that sell between $250K and $350K

  • Borrowers with 3–5 flips already under their belt

  • A simple exit strategy like resale or refinance

Example:

You find a house worth $100,000 that will be worth $200,000 after repairs.
The lender might offer:

  • 90% of the purchase = $90,000

  • 100% of rehab = $40,000

But—you’ll need to bring the 10% down, plus have extra money set aside for reserves, closing costs, and interest payments.

What Is a Hard Money Loan?

Hard money loans are different. They come from real people or small private lenders. These lenders focus more on the deal than on your credit or experience.

They work great if:

  • Your credit score is lower

  • Your deal is outside the box

  • You don’t have a lot of cash to put in

  • You need flexibility

Hard money lenders look at:

  • Loan-to-value

  • Market strength

  • Exit strategy

  • Your ability to finish the project

Example:

You find a house worth $200,000 after repairs.
You can buy it for $80,000 and fix it up for $20,000.

That’s only 50% of the ARV (After Repair Value).

With a deal this strong, a hard money lender might fund:

  • 100% of the purchase

  • 100% of the rehab

  • Even your closing costs

You walk in with $0 out of pocket because the deal makes sense.

Fix and Flip Lenders vs Hard Money Lenders

Let’s compare side by side:

Feature Fix and Flip Loans Hard Money Loans
Credit Score Needed 680+ Not score-driven
Property Type Standard, 1–4 unit Unique, land, large, or small deals
Experience Required 3–5 previous flips Helpful, but not required
Cash Needed Upfront Down payment + reserves May offer 100% if the deal is strong
Speed and Paperwork Slower, more docs Faster, less paperwork
Who It’s Best For Cookie-cutter flips Unique or off-market opportunities

So, Which Loan Should You Use?

It depends.

➡️ Use a fix and flip loan if your deal is clean, simple, and in a popular area. You’ll likely get a lower rate and lower points—but you must fit their box.

➡️ Use a hard money loan if your deal is messy, different, or small-town. You’ll pay a little more, but the lender will work with you. They care more about the property and less about perfect credit or experience.

Bonus: The Best Loan for BRRRR Investors

If you’re using the BRRRR strategy (Buy, Rehab, Rent, Refinance, Repeat), hard money can be a great fit. Why?

Because hard money lenders can fund 100% of the deal if the numbers work and you’re already pre-approved for your refinance loan.

Final Thoughts

Both types of loans can be powerful tools. The key is knowing:

  1. What your deal looks like

  2. How much cash you have

  3. What kind of lender will work with you

👉 Fix and flip loans give you great terms if you fit the mold.
👉 Hard money loans give you flexibility when life—and deals—don’t fit the mold.

Need Help Finding the Right Fit?

At Hard Money Mike, we work with both kinds of lenders. And we have free tools like:

  • ✅ Cash Flow Worksheet

  • ✅ Quick Deal Analyzer

These tools help you know if a deal is worth doing before you borrow a single dollar.

👉 Download them now and take the guesswork out of your next investment.

Stop confusing these loans! Fix and flip vs hard money explained! Watch our most recent video to find out more!

Will Your Real Estate Investment Actually Make Money?

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If you want to succeed in real estate, you have to ask this question early:
Will your real estate investment actually make money?

Too many new investors skip the numbers. They get excited. They imagine the profits. But then… the deal doesn’t turn out like they hoped.

Let’s change that.

Real Estate Is a Numbers Game — Not an Emotional One

Think of real estate like baking. It’s a recipe. You follow it, step-by-step. If you get the right ingredients in the right amounts, you end up with something great.

The key is knowing your numbers before you buy.

Because if you wait until after… it’s often too late.

Example: A Real Flip Deal Breakdown

Let’s say you’re buying a property for $150,000.
You plan to put $75,000 into renovations.
And you expect to sell it for $300,000.

That sounds like a $75,000 profit, right?

Not so fast.

There’s a lot more to it. Here’s what most people miss:

The Hidden Costs You Have to Know

Even when the top-line numbers look good, deals fall apart when you forget the real costs.

Here’s a quick list of what you should always include:

1. Realtor Fees

Usually around 5% when you sell. On a $300,000 sale, that’s $15,000.

2. Loan Origination and Carry Costs

Lenders charge fees to set up the loan. Then you pay interest while you hold the property. For this example, let’s say that’s $18,000 total over 6 months.

3. Title Costs

You pay this when you buy and again when you sell. Around $1,500 total is a safe estimate.

4. Insurance

You need coverage during the rehab. That’s about $1,800 for builder’s risk insurance.

So What’s the Real Profit?

Let’s do the math again.

  • Purchase Price: $150,000

  • Rehab Budget: $75,000

  • Total In: $225,000

Now subtract the real costs:

  • Realtor Fee: $15,000

  • Loan + Carry Costs: $18,000

  • Title Fees: $1,500

  • Insurance: $1,800

That’s $36,300 in extra costs.

So your actual total is now around $261,300.
And if you sell for $300,000, your real profit is about $38,700.

Still a great deal — just not the $75K you hoped for.

Why This Matters Before You Buy

This is why you need to ask:
Will your real estate investment actually make money?

Too many people focus on just two numbers: what they buy for and what they hope to sell for. But that’s only part of the story.

You must factor in all the other costs. Only then can you know if the deal is worth your time, energy, and money.

A Quick Tool to Help You

We built a simple tool called the Quick Deal Analyzer. You can download it for free at HardMoneyMike.com.

It walks you through:

  • Purchase price

  • Rehab costs

  • Loan terms

  • Realtor fees

  • All the sneaky costs most people forget

This tool helps answer that key question:
Will your real estate investment actually make money?

Final Thoughts: Follow the Recipe

The best investors don’t just hope for profits. They plan for them.

They run the numbers before they ever sign a contract. And they aim for deals with at least 10% to 15% profit, even after all the costs.

So if you’re asking yourself, “Will your real estate investment actually make money?” — now you have the tools to find out.

Keep it simple. Stick to the recipe. And go build the future you want.

Watch our most recent video to find out more!

The 100% Financing Strategy Every Real Estate Investor Should Know

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Let’s walk through The 100% Financing Strategy Every Real Estate Investor Should Know — a method that combines your lender with other smart tools to fully fund your deals.

What Is “100% Financing,” Really?

You’ve probably heard lenders say, “We’ll cover up to 75% of the ARV.”

That sounds great… but it’s not true 100% financing.

Why? Because it usually only covers:

  • The purchase price

  • Some or all of the rehab

But what about everything else?

Let’s Look at a Real Example

Say you find a property that will be worth $200,000 after repairs.
You’re buying it for $110,000 and putting $40,000 into repairs.

That adds up to $150,000 — and yes, a lender might cover that.

But here’s what they don’t cover:

  • Closing costs (title, insurance, origination)

  • Escrow advances for rehab

  • Upfront contractor payments

  • Materials (windows, doors, appliances)

  • Holding costs (mortgage, taxes, HOA)

  • Surprise repairs or last-minute changes

  • Staging, cleaning, or listing prep

See the problem?

Even with a great loan, you still need extra funds on hand — and that’s where the credit stack comes in.

The Secret to True 100% Financing? Your Credit Stack

The 100% Financing Strategy Every Real Estate Investor Should Know isn’t just about a lender.

It’s about stacking other money tools as well as your loan, like:

  • A HELOC (home equity line of credit)

  • A business line of credit

  • Business credit cards

  • OPM (Other People’s Money)

  • A private partner

This stack fills the gaps so you can:

  • Move fast

  • Keep your projects on schedule

  • Avoid costly delays

  • Take on more deals without stress

Best of all? These tools often don’t cost you anything unless you use them.

Why Speed = Profit

Every day a deal drags, your profits shrink.
That’s why successful investors always keep funds ready.

Let’s say a contractor needs $5,000 upfront to start.
If you wait 10 days to figure it out, your project stalls.
Now it’s not a 3-month flip — it’s a 6-month flip.

That delay costs you:

  • More interest

  • More taxes

  • More stress

  • And maybe even the next great deal

But if you have your credit stack set up? You fund it, keep the job moving, and finish strong.

How to Set Up Your Own Stack

Everyone’s stack looks a little different. Here’s how to start building yours:

First, Start with your main lender

  • Hard money can fund up to 75% of the ARV

Second, Add a HELOC or line of credit

  • Use this for materials, escrows, or delays

Third, Get a business credit card

  • Great for contractors or emergency purchases

Forth, Tap into OPM or partnerships

  • Know anyone with $20K–$50K sitting idle? Give them a better return than the bank.

Finally, Keep it all ready — not running

  • These should be available, not maxed out

What Happens After the Flip?

Here’s the smart part:
When you sell the property, you pay off everything — including your credit stack.

You’re not adding more debt.
You’re just using tools temporarily to get your project across the finish line.

Let’s Recap

The 100% Financing Strategy Every Real Estate Investor Should Know comes down to this:

✅ Use a lender for the purchase and rehab
✅ Stack other tools to cover the rest
✅ Set everything up before you start
✅ Move fast, reduce stress, and stay profitable

If your money is ready, your deals will go smoother — and your profits will grow.

Ready to Build Your Stack?

We’ve helped thousands of investors set this up.
Download our free guide, grab your spot in our upcoming workshop, or reach out with questions.

Visit Hard Money Mike
Or email us at info@hardmoneymike.com

Let’s get your money lined up — so you can focus on finding great deals and making real progress.

Watch our most recent video to find out more!