Is 100% Hard Money Financing Realistic for New Investors?
I’ve had quite a few new investors come in lately asking about 100% financing through hard money — meaning no money down, with both the purchase and rehab fully covered by the lender.
From what I’ve seen, that’s pretty rare unless there’s some creative structuring involved.
I know it can sometimes be done through JV partnerships, seller financing in second position, or gap funding — but even then, it's usually based on the deal's strength, experience, and having the right connections.
For those of you who’ve been in the game a while — have you seen a true 100% financing deal happen for a new investor? If so, how was it structured?
Curious how you all explain this to beginners who are eager to jump in but don’t have much capital yet. Would love to hear your insights, advice, or even deal examples!
Most Popular Reply
For a short-term rehab project, 100% financing on purchase and rehab is not all that uncommon. Several regional lenders offer it in some form, usually with experience requirements but not in every case.
Of course, normal profit margins are needed/expected, so the loan cost is usually capped at 70-75% of ARV and that right there is the margin of safety. Purchase and rehab costs kept within this ceiling would be 100% covered. That's correct - no money down. No gap funds, second lien, seller financing, etc needed. Very simple.
Of course, lender fees and third-party closing fees (title/insurance/appraisal) are not typically covered and are expected to be the borrower's skin in the game. Thus, available liquidity of at least $20-25k+ is expected to cover closing costs, a few interest-only payments, and partial rehab spending before draw reimbursement.
Fees are usually reasonable for hard money and in line with the higher leverage offered in such cases - 11-13% and 2-4 points, i.e. perhaps a tick higher than the mass of 10-20% down offerings out there.