Hard money for fix and flip

Member since 2019 · 1 post · 3 votes

Hello all!! This is my first post on here and excited to share my real estate investing journey with the best partner in the world, my wife.. we are looking into buying our first investment property via hard money. We have cash in available however I'm seeing that when applying for a HML you need proof of liquidity. My question, if it came down to it, will home equity suffice? Looking forward to the knowledge that you vets can provide!!

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Matthew Shafrazian

Member since 2025 · 2 posts · 1 vote

Hi Brandon,

Most hard money lenders will want to see at least 6-9 months of reserves in your bank accounts. Equity in your home won’t cut it. Excited for the start of your journey, if you got any questions feel free to message me.

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Matthew Shafrazian
Member since 2025 · 2 posts · 1 vote
1y
Hi Brandon,

Most hard money lenders will want to see at least 6-9 months of reserves in your bank accounts. Equity in your home won’t cut it. Excited for the start of your journey, if you got any questions feel free to message me.
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Ty CouttsBusiness Member
Lender · Denver, CO · Member since 2022 · 467 posts · 230 votes
1y
Hi Brandon,
Welcome to the forum, and congrats on starting your real estate investing journey! Hard money lenders (HML) typically want to ensure you have the financial stability to handle the property and loan repayment, so proof of liquidity is a common requirement. In terms of using home equity, you would either have to take out the money using a Home Equity Line of Credit (HELOC) or you could do a cash-out refinance. We at Aslan would love to be a help with either. If you have any more questions, feel free to DM me.

[email protected]719-641-5169
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Chris SeveneyBusiness Member
Moderator
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
1y
Quote from @Brandon Dionglay:

Hello all!! This is my first post on here and excited to share my real estate investing journey with the best partner in the world, my wife.. we are looking into buying our first investment property via hard money. We have cash in available however I'm seeing that when applying for a HML you need proof of liquidity. My question, if it came down to it, will home equity suffice? Looking forward to the knowledge that you vets can provide!!

Yes but depending on the loan type they may want to understand what that payment is. If its a DSCR loan it is less relevant whereas a bridge loan may look harder at your current financials to make sure you can afford the loan.
Great question though!
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Ashley C.
International · Member since 2023 · 120 posts · 20 votes
1y
Hi Brandon,

we might be able to assist. I'm a Managing Partner at a company that facilitates Full-scale flipping, lending, development, and portfolio acquisition.

Let's connect and chat!
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AJ ExnerPro Member
Lender · Springfield, MO · Member since 2023 · 652 posts · 315 votes
1y
Quote from @Brandon Dionglay:

Hello all!! This is my first post on here and excited to share my real estate investing journey with the best partner in the world, my wife.. we are looking into buying our first investment property via hard money. We have cash in available however I'm seeing that when applying for a HML you need proof of liquidity. My question, if it came down to it, will home equity suffice? Looking forward to the knowledge that you vets can provide!!

Hey Brandon,
Some would require some reserves, or at least to show cash to close on any new deal.
Are you anticipating opening up a HELOC on your primary to get the cash needed to close? Even with HMLs, they would either want to see reserves, or you would still need to put in a little 'skin' into the game to make the deal work
Good luck!
[email protected]417-427-2612
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Drago Stanimirovic
New to Real Estate · Miami, FL · Member since 2024 · 1k+ posts · 455 votes
1y
Brandon,

Yes, home equity can count as proof of liquidity for a hard money loan, but it depends on the lender. Some will accept a HELOC or cash-out refinance as liquidity, while others require liquid cash in a bank account. Since you're using hard money for your fix-and-flip, make sure you also have reserves for holding costs and unexpected expenses. If you need help with financing, let me know!

Drago
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Kyle DeutschmannPro Member
Investor · Washington, DC · Member since 2017 · 428 posts · 205 votes
1y
Quote from @Brandon Dionglay:

Hello all!! This is my first post on here and excited to share my real estate investing journey with the best partner in the world, my wife.. we are looking into buying our first investment property via hard money. We have cash in available however I'm seeing that when applying for a HML you need proof of liquidity. My question, if it came down to it, will home equity suffice? Looking forward to the knowledge that you vets can provide!!

Hey Brandon, welcome to BP! As others have mentioned, you typically need some liquid capital to get a deal done even if a hard money lender was funding 100% of the deal for you.

You'll need money for: closing costs, down payment (if any), operating capital to get the construction/rehab started (most HMLs reimburse you in draws for the work completed), along with some liquid reserves on top of that. Pretty reasonable when you think about it.

Happy to chat if you have additional questions.
[email protected]
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Mills Thumser
Lender · Member since 2024 · 33 posts · 4 votes
1y
Hey Brandon! Welcome to BP and the exciting journey of real estate investments.
We typically require verified liquidity for your cash to close and 3 months of reserves for your monthly interest payments. If you do have equity in your home, you could pull money using a Home Equity Line of Credit (HELOC) which would be an acceptable liquidity form.
Happy to connect to discuss further!
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Ko KashiwagiPro Member
Lender · Los Angeles, CA · Member since 2022 · 967 posts · 445 votes
1y
As others have mentioned, HELOC or cash out refinance should work. HML typically only requirement the down payment + few months of reserves, so you shouldn't need to show that much in cash.
310-848-9776
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Mike Klarman
Specialist · NJ · Member since 2022 · 1k+ posts · 650 votes
1y
shot your a dm Brandon.
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Evan Murphy
Real Estate Agent · Atlanta, GA · Member since 2025 · 11 posts · 8 votes
1y
Hey Brandon, Good luck with your first flip!
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