Requirements
Hard Money Loan Requirements: What Lenders Look For
A hard money lender reviews four things: the property, the plan, the borrower and the exit. Here is what each one means in practice, and the documents that answer each question.
The property
Is it good collateral?
Location, condition, property type, the as-is value and the after-repair value. The lender needs confidence the property alone could repay the loan.
The plan
Is the project realistic?
The scope of work, the renovation budget, the contractor and the timeline. A detailed budget with a contingency reads very differently from a single lump sum.
The borrower
Can you execute and carry it?
Liquidity and a clear plan. Wisdom Capital does not require a minimum number of completed flips to set leverage; new investors are welcome if liquidity is solid. For renovations over $100,000, experience is generally preferred.
The exit
How is the loan repaid?
A sale supported by comparable sales, or a refinance into long-term financing supported by rent and value. The exit should be clear before closing.
Documents to have ready
| Purchase contract | Executed purchase contract |
|---|---|
| Scope of work | The renovation plan and budget, submitted at closing; it drives the draw schedule |
| Identification | Driver's license or other government-issued ID |
| Bank statement | A recent personal or business statement showing liquidity |
| Title | Copy of title, underwritten by Old Republic, Fidelity, Stewart, First American or Chicago Title |
| Closing attorney | Name, phone number and email of your closing attorney |
| Draw account | Copy of a check made out to your LLC or corporation, for renovation draws |
| Security deposit | $1,250 check, first-time clients only. Not a fee: it is credited toward closing costs |
| LLC documents | Filing receipt, articles of organization, operating agreement, EIN, and driver's license for all members |
| Corporation documents | Certificate of incorporation, bylaws, shareholder agreement, EIN, and driver's license for all officers and shareholders |
This is Wisdom Capital's checklist for all loan programs. Loans must close under an LLC or corporation. The fix-and-flip program has no minimum credit score; the buy & hold / bridge program requires 700+.
What makes a property financeable
- Clear title that a title company will insure, without unresolved liens or ownership disputes.
- A supportable value backed by recent comparable sales, not list prices or the single best sale nearby.
- A property type the program covers. Investment property, not a primary residence.
- A scope the budget can actually complete, including permits where required.
- Insurability, including flood coverage where the property sits in a flood zone.
Requirements FAQ
What does a hard money lender look at?
The property and its after-repair value, the renovation plan and budget, the borrower's experience, liquidity and credit, and the exit strategy.
Do I need tax returns or pay stubs?
Hard money underwriting generally relies far less on personal income documentation than a bank mortgage. Liquidity is usually shown with bank statements. Confirm what your specific loan requires.
How much cash do I need?
Enough for the unfinanced part of the purchase, closing costs and points, the first phase of work before a draw, monthly interest, and a reserve. The loan calculator estimates it.
Next step
Have a Deal in Mind?
Submit the property details and let’s review the financing structure.
Helpful to include
- Property address and property type
- Purchase price and target closing date
- Renovation budget or scope of work
- Estimated after-repair value (ARV) and comps
- Your recent project experience, if any