Can I use equity from the subject property in lieu of a down payment for a hard money

[Joseph Hernandez]

Hello everyone, lets assume a hard money lender requires a 20% down payment for a fix n flip. if I purchase a SFR directly from a seller in foreclosure for 20% under market value, can I use the equity from the subject property in Lieu of a down payment for a hard money loan?

[Andy Sabisch]

Experience (number of successful projects) helps drive what HMLs will lend but with no skin in the game on your part (money not equity which is based on some arbitrary value) is a non-starter for almost all HMLs.  If you are buying a property below what you think is the actual value, great deal for you and more cash out the other end but lenders need to see you are vested in the property especially with limited experience.