Hard Money Lending & Down Payments — Do You Really Get Them Back?

[Jaylon Arnold]

Hey everyone,

I’m new to flipping and currently working with a hard money lender. One thing I’m trying to fully understand is how the down payment works in practice.

From my understanding, when you bring in your down payment (10–20% of purchase and sometimes rehab), it essentially sits in the deal as your equity. You don’t get it back until you sell the property or refinance, and then it comes back through your net proceeds — assuming the deal is profitable.

Is that the right way to look at it? For those of you who’ve flipped multiple properties, do you typically structure your deals in a way where you always recover your down payment at the end, or do you sometimes leave money in the deal?

Any tips, real-world examples, or numbers you can share would be super helpful for someone getting started.

Thanks in advance!

— Jaylon