As a real estate investor, you see a property’s potential. But as a hard money lender, we look at the same property through a lens of risk and reality. We want to fund your deal, but first, it needs to pass the test. Here are the top five things that make a project truly fundable in our eyes.
1. Iron-Clad Margins
First and foremost, the math has to work. A fundable deal must have healthy enough margins to comfortably absorb the purchase price, the full rehab budget, and financing costs, while still leaving a healthy profit baked in at the end. We look closely at the After Repair Value (ARV); if the spread between your total costs and the final resale price is too thin, the deal is a no-go… if that is the case, that should be concerning to you, that maybe this is not really a deal.
2. Liquidity and Capability
While hard money is asset-based, the borrower still matters immensely. We need to see that you have the financial capacity and liquid cash to handle upfront costs, holding expenses, and the inevitable surprises of a renovation. Beyond the bank statement, we look for capability. A proven track record or a highly experienced team shows us you have what it takes to get the project through the hoops.
3. Real-World Assumptions
We instantly spot inflated numbers. A fundable deal is built on actual facts, not wishful thinking or outdated comps. Investors who get funded present conservative, hyper-local market data and realistic timeline estimates. If your rehab estimate relies on “best-case scenario” labor costs or assumes a property will sell for $50k more than anything else on the block, it flags a lack of market awareness.
4. Comprehensive Risk Mitigation
Unforeseen delays and hidden costs are a guarantee in real estate. The best files we review factor in these hiccups explicitly. We look for a dedicated contingency fund within the rehab budget (usually 10–15%) and holding costs calculated for a realistic, extended timeline. Demonstrating that you have already accounted for permit delays or supply chain issues proves you are a professional.
5. Viable Exit Strategies
Finally, we want to know exactly how we are getting paid back. A strong deal never relies on a single, rigid plan. A fundable investor has multiple viable exit strategies. If the retail market softens, can you pivot the property into a long-term rental or a short-term Airbnb? Having a solid Plan B and Plan C reduces our risk and ensures your ultimate success. Hard Money loans are built to get you from a cash sale to fully financeable for your end retail buyer or to cash out and put in your cash-flowing portfolio.
At Jump Capital, we are here to be a true partner and a vital member of your team. Our goal is to set you up for ultimate success right from the start. We work alongside you to ensure every single box is checked, protecting your investment and guaranteeing a successful deal.
