Guide
Experience tiers: how lenders price your track record
Completed deals move your leverage and pricing more than your credit score does. Here is how the tiers usually work and what counts.
Nearly every hard money lender operates an experience matrix, and most will not show it to you. It maps completed projects in the last 24-36 months to maximum leverage and to price.
The typical shape
| Completed deals | Purchase LTC | ARV cap | Points |
|---|---|---|---|
| 0 | 70-80% | 65-70% | 3-4 |
| 1-2 | 80-85% | 70% | 2.5-3 |
| 3-5 | 85-90% | 70-75% | 2-2.5 |
| 6-10 | 90% | 75% | 1.5-2 |
| 10+ | 90%+ | 75% | 1-2 |
What counts as a completed deal
- Bought, renovated and sold - the gold standard, because it proves the exit.
- Bought, renovated and refinanced into a rental you still hold - counts at most lenders.
- Ground-up construction completed - counts, and counts double for construction lending.
- Wholesale assignments - usually do not count. You never took title or managed a rehab.
- Deals done in an entity where you were a passive member - varies; be prepared to evidence your role.
- Your licensed contractor's record - does not count as yours, but does help. See below.
Borrowing someone else's record
Three legitimate routes, in descending order of how much they help:
- A partner or co-guarantor with a record. They sign, so their experience applies. Expect to give up profit share.
- A licensed general contractor with comparable completed projects. Many lenders give partial credit, especially on construction.
- A project manager or consultant on the file. Weakest of the three, but not nothing.
Why the tiers are steeper than they look
Questions people actually ask
What are the qualifications for a hard money loan?
In the order the lender actually cares about: the deal (purchase price against as-is value and after-repair value), your cash into the transaction, your exit, your track record, and last and least, your credit.
Practically, most lenders want to see 80%-90% of purchase price from them and the rest from you, a rehab budget that has been scoped rather than guessed, a credit score somewhere north of 620-660 as a screen rather than a pricing input, an entity to take title, and reserves beyond your down payment. First-timers get less leverage and worse pricing, not a refusal.
How do I qualify for a hard money loan?
Bring a deal that works on the lender's numbers, not yours. That means a defensible ARV, a rehab scope with line items rather than a round number, cash to close that you can document, and a specific exit with a date. Everything else - credit, income, experience - moves your pricing but rarely decides the answer on its own.
Are hard money loans hard to get?
Comparatively, no - which is the point of the product. Approval turns on the collateral, so a borrower who would be declined instantly by a bank can be approved in days. What is hard is getting good terms: the gap between what an experienced investor with ten flips is quoted and what a first-timer is quoted is large, and it shows up in leverage and points rather than in a yes or no.
How difficult is it to get a hard money loan?
Days rather than weeks, and the paperwork is a fraction of a conventional file. The friction is in the valuation and the draw process, not the approval.
How hard is it to get a hard money loan?
See above. The realistic constraint for most first-time borrowers is not approval, it is cash to close - see how much cash you actually need.
What are the requirements for getting a hard money loan?
A property under contract or owned, an as-is value and an ARV the lender can support, a scoped rehab budget, documented cash to close, an entity in most cases, hazard insurance naming the lender, title, and a stated exit. Income documentation is usually light or absent; that is the trade you are making.
Can you get a hard money loan with bad credit?
Usually yes, which is one of the product's genuine advantages. Most lenders treat credit as a screen with a floor somewhere around 600-660 rather than as the basis of the decision, and some have no minimum at all when the leverage is low enough.
What weak credit costs you is leverage and price: less of the purchase financed, more points, a higher rate, sometimes a larger interest reserve. A recent foreclosure, bankruptcy or mortgage late is a bigger obstacle than a low score on its own, because it speaks to how you behave when a deal goes wrong. See bad credit and your first deal.