Discover the 70% rule lenders use, deal-killing mistakes to avoid, real loan rates, and how to get approved fast. This is the ultimate Hard Money Loans Tampa Guide.
I’ve funded nearly $20 million in hard money loans. I’ve also been on your side of the table, borrowing hard money since 2013. Here’s exactly what you need to know to get your loan approved – and more importantly, whether you should even be using hard money in the first place.
What You’ll Learn:
- When Hard Money Makes Sense (And When You’re Wasting Money)
- The ONLY Numbers That Matter to Lenders
- The 5 Deal-Killing Mistakes I See Every Week
- Your Pre-Application Checklist
- What Hard Money Really Costs in Tampa
- How to Negotiate Better Terms
- Lender Red Flags That Should Make You Run
When You Should (And Shouldn’t) Use Hard Money
Hard money is expensive. If you’re paying 12% interest plus 3 points, you better have a damn good reason. Here’s when it makes sense:
USE hard money when:
• You need to close in less than 2 weeks
• The property needs major repairs (banks won’t touch it)
• You’re buying at auction
• Your credit is below 620 or you can’t verify income
• You plan to flip within 6 months
DON’T use hard money when:
• You’re buying a rental for long-term hold
• The deal has thin margins (under 20% profit)
• You can qualify for bank financing
• You don’t have a clear exit strategy
I turn down loans every week from investors who should be using conventional financing. Yes, I make money when you borrow. But I make MORE money when you succeed and come back.
The Math That Gets You Approved
Forget your personal financial statement. Here’s what I actually look at:
The 70% Rule: Purchase Price + Rehab Costs should equal no more than 70% of After Repair Value (ARV)
Example that gets APPROVED:
• Purchase: $150,000
• Rehab: $50,000
• Total Investment: $200,000
• ARV: $300,000
• Percentage: 67% ✓
Example that gets REJECTED:
• Purchase: $200,000
• Rehab: $30,000
• Total Investment: $230,000
• ARV: $260,000
• Percentage: 88% ✗
That second deal? You’re going to lose money even if everything goes perfectly. I won’t fund it, and neither will any legitimate lender.
The 5 Deal-Killing Mistakes I See Every Week
1. Fantasy ARV Numbers
“My realtor said it could sell for $400K.” That’s not how this works. I need closed sales from the last 90 days within half a mile. Same bedroom/bath count. Similar square footage. Recently renovated. If you can’t find three solid comps, your ARV is wrong.
2. Lowball Rehab Budgets
$30K for a full renovation? In this market? With contractor shortages? Add 30% to whatever number you have. If you can’t afford the deal with realistic numbers, walk away.
3. No Exit Strategy
“I’ll figure it out” isn’t an exit strategy. You need Plan A (sell in 6 months) and Plan B (refinance into rental). With specific numbers for each.
4. Zero Skin in the Game
If you’re asking for 100% financing with no track record, good luck. Most lenders want to see 10-20% down. Show us you have something to lose.
5. Lying About Experience
“I’ve done tons of flips” followed by crickets when I ask for addresses. Be honest. First-time flippers get funded all the time – IF the deal is strong enough.
Your Pre-Application Checklist: Hard Money Loans Tampa
Want to get approved fast? Have this ready BEFORE you apply:
☐ The Purchase Contract – Signed by all parties
☐ Repair Scope – Detailed, line by line. Not “renovation: $50,000”
☐ 3-5 Comparable Sales – From MLS or Redfin, not Zillow estimates
☐ Contractor Bids – At least one, preferably two
☐ Proof of Funds – For down payment and reserves
☐ Exit Strategy – Written out with timeline
☐ Property Photos – Current condition, every room
Missing any of these? You’re not ready to apply.
Got everything ready? APPLY NOW for a NO COST, NO OBLIGATION loan quote.
What Hard Money Actually Costs in Tampa (2025 Rates)
Let’s talk real numbers. Here’s what you’ll actually pay:
Interest Rates:
• Institutional lenders (Kiavi, ABL): 7-9%
• Regional hard money: 10-12%
• True private money: 12-15%
Points:
• 2-3 points is standard
• 1 point = 1% of loan amount
• Due at closing
Loan-to-Value (LTV):
• Purchase: 70-90% of purchase price
• Rehab: 90-100% of renovation cost
• Total: Capped at 70-75% of ARV
Example on a $200,000 purchase with $50,000 rehab:
• Loan Amount: $225,000 (90% purchase, 100% rehab)
• Points (2%): $4,500
• Monthly Interest (12%): $2,250
• 6-Month Total Interest: $13,500
• Total Cost: $18,000
That’s $18,000 to borrow $225,000 for 6 months. Expensive? Yes. But if you make $60,000 on the flip, who cares?
How to Get Better Terms (What Actually Works)
Everyone wants lower rates. Here’s what actually moves the needle:
1. Bring a Bigger Down Payment
20% down instead of 10%? I might drop your rate a full point.
2. Show Your Track Record
Completed flips with profit/loss statements get better terms. First deal? Pay up.
3. Take a Shorter Term
6-month loan instead of 12? Lower rate. But make SURE you can hit that deadline.
4. Buy the Rate Down
Pay an extra point upfront for 1% lower interest. Do the math – sometimes it’s worth it.
5. Get Multiple Quotes
Tampa has dozens of hard money lenders. Use that competition.
What DOESN’T work? Sob stories about why you need a better rate. This is business.
Lender Red Flags That Should Make You Run 🚩
Not all hard money lenders are created equal. Watch for these:
Prepayment Penalties – On a 6-month flip loan? Absolutely not. Any lender charging these is predatory.
Upfront Fees Before Approval – Legitimate lenders don’t charge application fees. If they want money before giving you a commitment letter, run.
Unclear Terms – Can’t get a straight answer on rates? Terms keep changing? Find another lender.
No Local Presence – California lender who’s never seen Tampa? They won’t understand your market.
Pressure Tactics – “Rates go up tomorrow!” No legitimate lender plays these games.
The Bottom Line
Hard money isn’t complicated. It’s expensive, fast money for deals that make sense. The lender doesn’t care about your credit score or your day job. They care about one thing: Will this deal make money?
If you can prove it will – with real comps, realistic budgets, and a clear exit – you’ll get funded. If you can’t, you won’t. It’s that simple.
My final advice? If you’re not absolutely certain your deal meets the 70% rule with room for error, don’t apply. Go find a better deal. The market’s full of them if you know where to look.
And remember: The goal isn’t to get a loan. The goal is to make money. If hard money helps you do that, use it. If not, don’t.
Think you’ve got a deal that makes sense? APPLY NOW for a NO COST, NO OBLIGATION loan quote. I’ll tell you straight if it works or not.
Daniel Paloscio
Founder, SEP Capital
P.S. – Still have questions? Good. That means you’re thinking. The investors who ask the hard questions upfront are the ones who succeed. The ones who just want quick money? They’re usually my foreclosures.
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