hard money lenders & timelines
Member since 2024 · 3 posts · 2 votes
hard money lenders & timelines
Most Popular Reply
Specialist · NJ · Member since 2022 · 1k+ posts · 656 votes
2moLet's buy 1234 Example Ave. We are buying it for 100k. It needs 75k in work. That's 175k project cost. First thing I do is divide the project cost by ARV to get that number. So let's say it has a 70% project cost so 175k/.7 = 250k. We need an ARV of 250k for this project to have the room to get your money out at the refinance table.
So you buy this house for 100k. You are new so you get 80% leverage. That's 80k toward the purchase and 75k in escrow for rehab for a total loan amount of 155k. That number is your payoff. When you go to sell or refi the title company will retrieve the payoff to any lien, it's a key part of their job. Your 155k payoff is part of the escrow process.
So let's say you bought the house and the rehab took 9 months but it's finally done, these days there are lenders who will refi you without a lease. So when ready you will need to apply for a DSCR loan. This is where your credit is key. I just priced a DSCR for a 660 credit. Their par rate was 8.5%. I also have a deal I am closing next week, a DSCR where the credit was 770, and their par rate was in the 6s.
Also, you would need to bring 20k plus closing costs plus show at least 6 months in holding costs so you would need 35k just to get through the transaction. And if your margins are thin, it most likely is not coming back to you at the refinance. You'll have to leave most or all in, just hope you don't have to come to the table with cash to close the refi.
The lower the project cost to ARV is, the better the deal. Years ago, when I would hunt deals the traditional way: Agent hunting MLS and Wholesale, you'd hope and pray to get a 65% - 70% project cost %. And at the end of the day the 65% - 70% project costs easily become 80% - 85% project costs after intangibles.
A deal to me now is something under 60% project cost. You have a nice meaty margin that can beat intangibles or provide a score if everything goes well.
11 Replies
- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes2moCongratulations. You can join a local REIA (Real Estate Investment Association) and meet like minded people with experience. Check NationalREIA.org for a group near you. They cost usually $20 a month and have meetings and people from all kinds of trades attend.
Quote from @Jerome Cheeves:
Hi guys,
I'm Jerome, I recently purchased my first house back in April of 2026 and it's been going very well thus far. I am now seeing a lot of content involving BRRR strategy and how it helped so many people grow their portfolio and I wanted to get involved. Come around may-october of next year I will want to purchase my first BRRR property but I don't fully understand how the hard money lender or payback timeline works or how to get in touch with local contractors to get a estimate for repairs or even planning a timeline for refinancing.... any tips, tricks, or youtubers/mentors that walk you through the process. I've been doing my best to watch and study just wanting to reach a hand out just incase someone can point me in the right direction.
But generally, hard money will be expensive and is used for quick flips and getting into properties. It is not useful or intended to be long term funding. - Lender · Pickerington, OH · Member since 2026 · 49 posts · 39 votes2moJerome, you’re actually doing the right thing by learning the process now instead of waiting until you find a deal. For a BRRRR, hard money is usually the short-term piece used to purchase and rehab the property. The lender will look at the purchase price, rehab budget, ARV and your experience/credit/liquidity. Rehab funds are often released in draws as work is completed rather than all upfront. Once the rehab is finished, you get the property rented and refinance into longer-term financing, often a DSCR loan for investors. One thing I’d pay close attention to is the refinance requirements before you ever buy the property, seasoning, max LTV, appraisal requirements, etc. can vary by lender. You don’t want to finish the rehab and then find out your exit loan won’t work the way you expected. For contractors, local REIA groups are great. I’d also ask investor-friendly agents and property managers who they use and get 2–3 detailed bids before committing. I broker investor loans and work with both the short-term rehab side and the long-term DSCR side. If you ever want someone to walk through a potential deal with you and show you how the numbers would look from purchase → rehab → refinance, I’d be happy to help.
- 2moStacy RaskinBusiness MemberLender · Member since 2022 · 1k+ posts · 514 votes
For hard money loans / fix and flip programs, there are options where you can get up to 90% of the purchase price and 100% of the rehab done on draws. Lending options will depend on borrower's credit profile and property location. Most hard money loans or fix and flip loans are up to a year to pay back the loan. You can have a longer timeline to pay back the loan but most investors will pay back in a year or less.
Once the property is rehabbed and you're ready to refinance, you can refinance the property with a DSCR loan since the seasoning or waiting time to use the new appraised value is less or no waiting time depending on the program. Happy to connect to discuss further.
Bright Skyline518 Reviews - Real Estate Broker · New York, NY · Member since 2020 · 2k+ posts · 1k+ votes2mo
Hey Jerome,
For the hard money side, these are typically short-term loans, often around 6-12 months depending on the lender and project. Make sure you understand the interest rate, points, loan term, extension fees, and how rehab funds are handled. You also want to know what happens if your rehab takes longer than expected.
I'd also work backwards from your refinance. Before buying, have a good idea of the property's ARV, rehab cost, expected rent, and what a long-term lender will likely lend on the finished property. That will help you figure out how much you can afford to put into the deal.
For contractors, I'd start meeting people now. Local investor groups and REIA meetups are probably one of the best places to start. You'll meet other investors who can tell you which contractors they've actually used, along with lenders, agents, property managers, and other people who can become part of your team. I'd also try BiggerPockets meetups and local Facebook investor groups in the Norfolk/Hampton Roads area.
And definitely start talking to lenders before you need the money. For the refinance, look into DSCR and other investment-property lenders and ask about seasoning requirements, appraisal requirements, LTV limits, and how they qualify the property.Feel free to reach out if you have any questions - my DMs are always open!
- 2moGregory AcsPro MemberLender · MD · Member since 2025 · 226 posts · 87 votes
The biggest thing I'd recommend is understanding your exit strategy before you ever close on the purchase. With a BRRRR, the hard money loan is only one piece of the puzzle. You also want to know your renovation budget, expected timeline, projected after-repair value, and what your refinance options could realistically look like once the work is complete.
I’d also build your contractor relationships before you find a deal. Having reliable estimates upfront makes it much easier to know whether a project actually works instead of trying to figure everything out after you’re under contract. The more you can plan before closing, the smoother the refinance process tends to be.
- Specialist · NJ · Member since 2022 · 1k+ posts · 656 votes2mo
Let's buy 1234 Example Ave. We are buying it for 100k. It needs 75k in work. That's 175k project cost. First thing I do is divide the project cost by ARV to get that number. So let's say it has a 70% project cost so 175k/.7 = 250k. We need an ARV of 250k for this project to have the room to get your money out at the refinance table.
So you buy this house for 100k. You are new so you get 80% leverage. That's 80k toward the purchase and 75k in escrow for rehab for a total loan amount of 155k. That number is your payoff. When you go to sell or refi the title company will retrieve the payoff to any lien, it's a key part of their job. Your 155k payoff is part of the escrow process.
So let's say you bought the house and the rehab took 9 months but it's finally done, these days there are lenders who will refi you without a lease. So when ready you will need to apply for a DSCR loan. This is where your credit is key. I just priced a DSCR for a 660 credit. Their par rate was 8.5%. I also have a deal I am closing next week, a DSCR where the credit was 770, and their par rate was in the 6s.
Also, you would need to bring 20k plus closing costs plus show at least 6 months in holding costs so you would need 35k just to get through the transaction. And if your margins are thin, it most likely is not coming back to you at the refinance. You'll have to leave most or all in, just hope you don't have to come to the table with cash to close the refi.
The lower the project cost to ARV is, the better the deal. Years ago, when I would hunt deals the traditional way: Agent hunting MLS and Wholesale, you'd hope and pray to get a 65% - 70% project cost %. And at the end of the day the 65% - 70% project costs easily become 80% - 85% project costs after intangibles.
A deal to me now is something under 60% project cost. You have a nice meaty margin that can beat intangibles or provide a score if everything goes well.
- 2moErik EstradaBusiness MemberLender · Member since 2022 · 6k+ posts · 1k+ votes
Quote from @Jerome Cheeves:
Hi guys,
I'm Jerome, I recently purchased my first house back in April of 2026 and it's been going very well thus far. I am now seeing a lot of content involving BRRR strategy and how it helped so many people grow their portfolio and I wanted to get involved. Come around may-october of next year I will want to purchase my first BRRR property but I don't fully understand how the hard money lender or payback timeline works or how to get in touch with local contractors to get a estimate for repairs or even planning a timeline for refinancing.... any tips, tricks, or youtubers/mentors that walk you through the process. I've been doing my best to watch and study just wanting to reach a hand out just incase someone can point me in the right direction.
Happy to connect on the financing side!
LuxePrivate Investments LLC 572 Reviews - 2moVijay FriedmanBusiness MemberMiami, FL · Member since 2026 · 766 posts · 123 votes
Quote from @Jerome Cheeves:
Hi guys,
I'm Jerome, I recently purchased my first house back in April of 2026 and it's been going very well thus far. I am now seeing a lot of content involving BRRR strategy and how it helped so many people grow their portfolio and I wanted to get involved. Come around may-october of next year I will want to purchase my first BRRR property but I don't fully understand how the hard money lender or payback timeline works or how to get in touch with local contractors to get a estimate for repairs or even planning a timeline for refinancing.... any tips, tricks, or youtubers/mentors that walk you through the process. I've been doing my best to watch and study just wanting to reach a hand out just incase someone can point me in the right direction.
@Jerome Cheeves
For a BRRRR, I'd work backward from the refinance before buying the property. Make sure the projected rent, ARV, rehab budget, and total amount you'll have into the deal leave enough room for the DSCR refinance to pay off the hard money. That can save you from getting stuck with a short-term loan after the rehab. - 2moJesus SuarezBusiness MemberLender · TX, FL · Member since 2025 · 131 posts · 56 votes
Congrats on taking the first step, Prepping now for next year gives you a huge advantage.
Hard money lenders cover the purchase and rehab costs using short-term, interest-only loans (usually 6–12 months). Your goal is to finish repairs, get a tenant placed, and refinance into a long-term loan before that 12-month mark to pay off the lender. Keep in mind that many conventional banks require a 6-month "seasoning" period before letting you refinance based on the new value, though some DSCR lenders can move faster.
To find solid contractors, skip Google and ask active local investors at REIA meetups who they actually use today. For learning the ropes, binge David Greene and Henry Washington on YouTube, or grab J Scott's book on estimating rehab costs. Connect with an investor-focused lender now so you know your exact refinance requirements well before you start making offers!
- 2moRobin SimonBusiness MemberLender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
Quote from @Jerome Cheeves:
Hi guys,
I'm Jerome, I recently purchased my first house back in April of 2026 and it's been going very well thus far. I am now seeing a lot of content involving BRRR strategy and how it helped so many people grow their portfolio and I wanted to get involved. Come around may-october of next year I will want to purchase my first BRRR property but I don't fully understand how the hard money lender or payback timeline works or how to get in touch with local contractors to get a estimate for repairs or even planning a timeline for refinancing.... any tips, tricks, or youtubers/mentors that walk you through the process. I've been doing my best to watch and study just wanting to reach a hand out just incase someone can point me in the right direction.
The BRRRR Book that you can find in the BP Bookstore (even though they have sadly really de-emphasized this part of the site over the years) is still a great resource and holds up pretty well. The refinancing part is a little outdated, especially since 2023 when conventional loans upped to 12-month seasoning, so for refinancing now DSCR is typically the best option and for BRRRR-friendly DSCR Lenders you can now find some that can do other DSCR refinance as soon as you are done with the rehab
Harpoon Capital514 Reviews - 2dIrv ArreolaPro MemberLender · Los Angeles CA · Member since 2026 · 41 posts · 7 votes
Whatever term they quote you, ask what it takes to extend. Is it just a fee, or do you need the rehab done or a unit leased? That one answer tells you how much cushion you really have.
Join the conversationCreate a free account to reply, vote on answers and follow this thread.