What Private & Hard Money Lenders REALLY Want to See (And Why Most Investors Get It Wrong)
There’s a lot of fast-talking nonsense floating around about private and hard money lending.
Some in the industty act like you can just flash a dream and get funded overnight. Others tell you credit doesn’t matter, money down isn’t needed, or that lenders are just waiting around to throw cash at you.
That’s not how this works.
At The Quantum Funding Company, we don’t do hype. We do clarity. Whether it’s your first deal or your fiftieth, you deserve to understand exactly what private and hard money lenders need from you—and why.
Let’s break it down.
1. The Deal Itself (This Comes First—Always)
What they want:
Private and hard money lenders want to see a contracted deal in-hand—a signed purchase agreement—before they’ll seriously talk numbers with you.
Why it matters:
PMLs and HMLs aren’t banks. Banks fund people—based on income, credit, and personal assets. But private and hard money lenders? They fund deals.
These lenders are laser-focused on the asset—the property, the numbers, the potential return. If there's no deal on the table, there's nothing to underwrite. No value to secure the loan. No path to profit.
They’re asking:
What’s the purchase price?
What’s the after-repair value (ARV)?
What’s the scope of work and the rehab budget?
What’s your exit strategy?
Until you’ve got a contract, you’re not seen as serious. You’re just kicking tires.
See my blog post: How to Analyze a Deal Like a Pro to understand how to prepare the numbers that lenders want to see.
2. Your Experience
What they want:
Lenders want to know if you’ve done this before—or at least if you’ve done your homework.
Why it matters:
Private money lenders aren’t just betting on the property. They’re betting on you to manage the project well enough to repay the loan. Your track record gives them confidence.
They’re asking:
How many flips or rentals have you completed?
Have you ever managed a renovation?
Do you have a contractor or crew lined up?
Have you exited a deal successfully?
Don’t have experience? That’s okay—if you have a solid team or mentor. Lenders just need to believe you won’t crash the plane on your first flight.
Newer investor? Check out my post: First-Time Flipper? Read This Before You Apply for a Loan
3. Your Relationship With the Lender
What they want:
They want to know you. Can they trust you? Are you responsive, coachable, and professional?
Why it matters:
Lenders are people. And like all people, they do business with people they like, trust, and feel good about.
In the private lending world, relationships drive approvals. If you communicate clearly, follow through, and make the lender’s life easier, you’re golden.
But if you ghost, act entitled, or rush the process—you’re a risk. And lenders don’t fund risk; they fund opportunity.
Want to stand out to lenders? Start by applying for Quantum’s free consulting—it’ll position you as someone serious and coachable.
4. Money Down
What they want:
Lenders want you to have skin in the game—usually 10–20% of the purchase or rehab cost.
Why it matters:
Think about it: Would you lend $200,000 to someone with zero dollars in the deal?
Lenders want to know you’re committed. That you’ll fight to protect the investment because you have something to lose too.
No money down? That usually means you need to bring in a capital partner or find a cheaper deal.
Need creative ideas? Read: How to Fund a Deal When You’re Broke
5. Money in Reserves (More Than You Think)
What they want:
Lenders want to see you have extra cash in the bank—enough to cover overruns, delays, or hiccups.
Why it matters:
Every experienced investor knows the truth: things go wrong. Prices rise. Contractors flake. Permits take forever.
Lenders know this too. And they want to know you won’t default at the first bump in the road.
Especially on your first deal with them, expect them to ask for:
3–6 months of interest payments in reserve
A rainy-day fund for cost overruns
Maybe even proof of access to a credit line
Some lenders will even consider retirement investments as reserves.
Think of reserves as your “shock absorbers.” Without them, the ride gets bumpy fast.
6. Credit Score
What they want:
Lenders will look at your credit—yes, even private lenders.
Why it matters:
They’re not judging you like a bank. But they are looking for patterns of responsibility.
Late payments? Collections? That’s a red flag. Decent credit (usually 620+) shows you pay your bills and manage debt.
Bad credit doesn’t automatically disqualify you—but it might mean:
Higher interest rate
Bigger down payment
Stricter terms
Final Thoughts: The Best Borrowers Understand the Game
Here’s the bottom line:
Private and hard money lenders don’t care about your dreams. They care about your deal, your discipline, and your plan.
That may sound harsh. But it’s actually empowering—because you can control every one of those things.
Stop looking for magic money and start building lender trust the right way. At The Quantum Funding Company, we don’t chase unicorns—we help serious investors close deals.
Want guidance? Apply for our free client consulting and we’ll walk you through everything. No fluff. No fast talk. Just real help from real experts.
Share this post if you're tired of charlatans selling fantasy and you're ready for real investing advice.
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