What Makes a Property a Good Candidate for Hard Money?

Jul 30, 2025 | Hard Money Blog

What Makes a Property a Good Candidate for Hard Money?

Hard money loans aren’t just for distressed deals. They’re strategic tools for fast acquisition, rehab funding, and rental repositioning — if the property qualifies.

Here’s what lenders like HardMoneyMan want to see before greenlighting your deal.

Key Property Criteria

Location Strength

  • In active investor zones (Fishtown, South Philly, Brewerytown)
  • Comparable sale velocity
  • Avoid appraisal gaps in low-volume zips

Price-to-ARV Ratio

  • Low acquisition price with clear value-add potential
  • Ideal: Buy at 65–70% of ARV minus rehab costs

Zoning & Use Type

  • Residential 1–4 unit preferred
  • No condos or co-ops
  • Mixed-use and land allowed (case by case)

Deal Examples That Work for Hard Money

Fix & Flip – Rowhome in 19125

  • Purchase: $175K
  • Rehab: $60K
  • ARV: $315K
  • ROI: 23%

Rental Reposition – Triplex in 19104

  • Vacant units
  • $120K in rehab
  • DSCR refinance eligible after lease-up

Spec Build – Lot in Point Breeze

  • Prior permits pulled
  • New 1,800 sq ft home appraises at $625K

 

What Makes a Property Good for Hard Money Lending?

When evaluating a property for hard money financing, the key factor isn’t credit — it’s asset viability. Investors choose hard money loans for speed, flexibility, and the ability to fund deals that traditional lenders won’t touch.

If you’re targeting fix & flip opportunities, the property’s after-repair value (ARV) and marketability are top priorities. Run the numbers using our DSCR & ROI Calculator to estimate potential returns and make data-backed decisions.

 Eligible Property Types for Hard Money Lending

  • Distressed single-family homes ready for rehab
  • Multi-unit residential properties (duplexes, triplexes)
  • Mixed-use buildings with residential majority
  • Vacant land and new construction lots (with permits)

For rehab-heavy deals, bundle your acquisition and renovation costs into a single loan with draw-based funding. Learn more on our Fix & Flip Loan Program page.

 Location Matters — But So Does Strategy

Hard money lenders prioritize urban markets with investor demand and reliable comps. In New Jersey, areas like Newark, Jersey City, and Asbury Park are investor favorites. If you’re buying in these zones, check eligibility with our New Jersey Hard Money Loans team.

What to Prepare Before You Apply

To strengthen your application, submit:

  • Purchase contract
  • Scope of work
  • Contractor bids
  • Comparable sales (comps)
  • Entity formation documents (LLC or Corp)

Got tenants? Our Rental Property Loans are ideal for DSCR-qualified income properties. Use them to refinance or scale your portfolio.

 

FAQ: What Makes a Property Eligible for Hard Money Lending

Single-family homes, duplexes, triplexes, and multi-family (up to 4 units) are ideal. Mixed-use and land deals may qualify case-by-case.
No. Hard money loans are often used for distressed or vacant properties that need rehab or repositioning.
Yes. Ground-up loans are available for buildable lots with permits and a clear exit strategy.
Very. Properties in active investor zip codes with strong comps (like 19125 or 19130 in Philly) are preferred.
Expect up to 75% of the purchase price, or 65–70% of ARV if rehab is involved.
Possibly — but lenders prioritize deal strength and exit potential. Urban markets perform better.
Sometimes. Mixed-use with residential majority (e.g., retail + apartments) may qualify. Full commercial usually needs specialty financing.
Weak comps, overestimated ARV, unclear rehab scope, poor location, or inflated acquisition price.
Yes — especially for DSCR rental loans. Lenders may require lease agreements and income documentation.
Yes. Many lenders offer draw-based loans that cover all three if the budget and timeline are solid.
In PA: 19125 (Fishtown), 19130 (Fairmount), 19104 (University City). Fast resale and solid ARV potential.
Scope of work, purchase contract, comps (MLS/Zillow), rehab estimates, and title report.
Not always — some lenders will waive them for low-risk deals with strong comp data. However, we require appraisals on all loans we fund.
Yes. Hard money is often the only financing option for auction and off-market acquisitions.
Absolutely — most hard money loans are structured under business entities for liability and tax purposes.