Hard Money Lending for Flip At More Than Purchase Price?

5 Replies

Hello all.

I have lived in my NYC neighborhood for more than 20 years, so I know this area very well. There is a SS around the corner (literally) from me that is selling for about half its rehabbed value. I do not have the cash to purchase and rehab the house.

The house is up at $179K. Typical prices in this area is around $350K. I'm hoping that I won't need to spend more than $55K on the house and since I can trip and be in the house in a heart-beat, I can actively manage the rehab. The goal is to flip.

Has anyone had experience with a hard money lender who lends more than purchase price? I only have $20K liquid currently and own two ultra low value rentals (one outright) that cash flow well. Your thoughts are welcomed.


Be open to just flipping this deal for a nice profit. Leave money on the table for the fix and flipper. You walk away with a nice profit and now you have cash to do a future deal. There are always good deals out there. Take the money and run.

Just a thought.


@Mark Kemp

Thanks for responding! You're suggesting a wholesale deal? I'll need proof of funds to get the bank to spit in my direction, I'm thinking. I've never dealt with a short sale before, but I hear that they can take time to close?

I don't know that I would qualify for a traditional mortgage since I have a 1st on one rental, and a HELOC drawn on my own home for about 10% of the value. I'm definitely open to wholesaling though. I pass this home on a daily basis and "what if" keeps rolling through my mind!

Sandy you won't be able to wholesale a short sale as it will more than likely be a breach of the contract with the bank.  

In regards to the hard money question,  most lenders will lend more than the purchase price as they will lend you the purchase price plus the rehab amount (or some percentage of each) that will be held back in escrow.  So if you can get it around $179 then the lender may give you the $179k and the $55k for rehabs.   Most will want more skin in the game but that's typically how it works.  Also HMLs can give you proof of funds for your purchases as well.  

However I would leave off saying that $20k probably isn't enough to flip a house.   With these numbers you will spend more than that at closing,  and then you will need to front your rehab (probably the first $10-15k) so $20k wouldn't be enough liquid cash IMO. 

yes Lenders usually lend more then purchase price. Some might require a down payment few dont. Once the deal is funded and your numbers are verified. Lets say you ask for 55k for repair. They way that works is lets say the lender does 3 draws for 18,333. Well you will have to front the money of 18,333 then once you submit receipts or lender walks through you will be reimbursed your money and eligible for a new draw. My advice is rehabbing looks easy but very difficult. I will find a active rehabber I TRUST and try to split deal with him. and you guys split payments and work. 

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