How is private (hard money) lending different from a bank loan?

We are asset-based, which means we underwrite the property, its equity, and your business plan rather than your personal income and tax returns. That lets us fund in days instead of the 30 to 60+ days a bank takes, on short interest-only terms built around a flip, refinance, or sale. You pay a higher rate than a bank in exchange for speed, flexibility, and certainty on deals a bank cannot fund in time.

How fast can you close?

Fix and flip and residential bridge loans typically close in 5 to 7 days once we have your basics. Rental (DSCR) loans usually take 2 to 3 weeks because of the appraisal and rent verification, and SBA financing runs 30 to 90 days. The biggest variable is how quickly title, insurance, and your documents come together.

Do you check credit, and is there a minimum score?

We do run credit, but on our asset-based loans it carries far less weight than at a bank, and weaker credit can often be offset with a larger down payment or lower leverage. There is no personal income test on these programs. Credit matters most on long-term rental loans, where we look for a 640 minimum and it affects your rate and leverage.

Do I need to provide income documents or tax returns?

Generally no. Our bridge, fix and flip, and construction loans qualify off the property and your equity, and our DSCR rental loans qualify off the property's rent, so we do not ask for W-2s or pay stubs. We will want to see bank statements or proof of reserves. SBA and conventional investment loans are the exceptions and are fully documented.

What do you need to give me a quote?

Just the basics of the deal: the property address or type, the purchase price or current value, your rehab budget, the loan amount, and your exit plan. We can often pre-qualify you over the phone or through a short application and issue a proof-of-funds letter before you are even under contract.

What is a point, and how do your rates compare to a bank?

A point is an upfront fee equal to 1% of the loan amount, and origination on private loans typically runs 1 to 3 points. Our rates are higher than a bank, generally in the high single digits to low teens depending on the program, because the loans are short, fast, and flexible. When you compare offers, weigh the rate and the points together as your true cost of capital.

Fix and Flip · 5 min read

How to Estimate a Rehab Budget

The short answer

A realistic rehab budget makes or breaks a flip and your loan. Learn how to build a scope of work, price it, and add the right contingency.

To estimate a rehab budget, build a detailed scope of work, price each line from real quotes or known costs, and add a contingency for surprises. Lenders fund the rehab against this budget, so a realistic number protects both your deal and your draws.

1. Build a scope of work

Walk the property and list every item, by area and system: roof, HVAC, electrical, plumbing, kitchen, baths, flooring, paint, exterior, landscaping. The scope is the backbone of both your budget and your draw schedule.

2. Price each line

Get contractor quotes for big-ticket and specialty work.
Use known per-unit costs for repeatable items (flooring per square foot, paint per room).
Separate materials from labor where it helps accuracy.

3. Add contingency and carrying costs

Add a contingency (commonly 10-20%) for the things you cannot see until walls open up. Then account for carrying costs during the hold, interest, insurance, taxes, utilities, so your numbers reflect the true cost to the finish line.

4. Sanity-check against ARV

Your purchase plus rehab needs to leave room under the after-repair value for profit and the lender's ARV cap. If the budget pushes you past that, re-scope or renegotiate the buy.

Frequently asked

How do you estimate a rehab budget?

Build a detailed scope of work by area and system, price each line from contractor quotes or known unit costs, and add a contingency (often 10-20%) plus carrying costs.

How much contingency should a rehab budget include?

Commonly 10-20%, to cover hidden problems that surface once work begins, like wiring, plumbing, or structural issues behind walls.

Why does the lender care about my rehab budget?

The lender funds the rehab in draws against your budget and caps total loan exposure under the after-repair value, so a realistic budget keeps the deal and your draws on track.

Rates, leverage, and timelines mentioned in this guide are typical figures, subject to underwriting and market conditions. Not a commitment to lend. Nothing here is legal, tax, or investment advice.

Related programs

Fix and Flip Ground-Up Construction

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