Good rule of thumb is 20% of the purchase price plus 6 months of mortgage payments for the subject property to include principal, interest, taxes, insurance, and HOA.

They look for equity capture, which is when you buy an asset for less than it’s worth. Also, net month profit is a factor which is the after-tax profits and mortgage cost are subtracted.

The Loan-to-Value (LTV) Ratio is the ratio of the mortgage lien as a percentage to the total appraised value of the property. The mortgage lien is the security from the lender to support the loan for the purchase of real estate, and the appraised value is an evaluation of an investment property’s value based on comparable sales and the property as an entity.

It is the value of the property subject to all the disclosed repairs being done. This value is the “fixed-up” value and typically includes the investment properties cosmetic work and repairs.

A Hard Money loan is a short term financing loan tool used to leverage your out of pocket in an investment property transaction. This type of loan allows you to purchase, rehab, and either flip for a profit or hold the property for rental income.

The typical credit score for a Hard Money is 650, however there are some exceptions if you plan to “Flip” or resale the property.