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Before you spend time building a file, verify that the deal is fundable and the borrower is workable. Ask the core questions upfront: deal type, property location, purchase price, rehab budget, ARV, borrower experience, borrower credit, timeline, and exit strategy. If the math does not work or the deal does not fit any lender's credit box, say so now — not after you have spent three hours on the file.
A hard money broker who submits every inquiry that comes through without qualifying it is building a reputation for wasting lenders' time. Lenders talk. AEs talk. Submitting bad deals to the wrong lenders repeatedly will eventually close doors you need open.
On the other side, a broker who says "here is exactly why this deal does not work and what would need to change" earns credibility with borrowers — even when the answer is no. A borrower who respects the honesty often comes back when they have a better deal.
Qualification is not gatekeeping. It is doing your job before you take on someone else's problem.
For every deal inquiry, get these answers before you do anything else:
1. What type of deal is this? Fix and flip? DSCR/rental? Ground-up construction? Bridge? Commercial? The deal type determines which lenders to consider and which program criteria apply.
2. Where is the property? State and city. Many lenders are not licensed in all 50 states. Geographic eligibility eliminates a large portion of the lender universe before any other criteria are applied.
3. What is the purchase price? Is this within a loan size range that hard money lenders actively fund in that market?
4. What is the estimated rehab budget? (for fix and flip/construction) Does the scope of work match the budget? Is the number realistic or a guess?
5. What is the ARV? After-repair value for fix and flip and construction deals. Where does this number come from — comparable sales, or wishful thinking? A borrower who cannot explain their ARV with comp data is going to have problems at appraisal.
6. What loan amount does the borrower need? Run the LTC and ARV LTV math. Does the loan amount the borrower needs fall within program limits for their experience level?
7. How many prior deals has the borrower completed? This is one of the most important qualifying variables. First-time investors face a narrower lender universe and lower LTC limits. Experienced investors have more options.
8. What is the borrower's approximate credit score? Not for a conventional mortgage analysis — to identify which programs are available. A borrower with a 580 FICO has very different options than one with a 720 FICO.
9. When does this need to close? Timeline pressure determines which lenders are viable. A borrower who needs to close in 7 days needs a lender who can move in 7 days — not one who advertises 7 days but actually takes 21.
10. What is the exit strategy? Sell? Refinance into DSCR? How does the borrower plan to pay off the loan? The exit strategy tells you if the deal makes sense and which lenders are right for it.
Once you have the core numbers, do the quick underwriting math yourself:
LTC = Loan Amount ÷ (Purchase Price + Rehab Budget)
If the borrower wants 90% LTC and has 1 prior deal, many lenders cap at 75-80% LTC for that experience level. The deal math may not work without more equity from the borrower.
ARV LTV = Loan Amount ÷ ARV
Most fix and flip lenders cap at 70-75% of ARV regardless of LTC. If the loan the borrower needs exceeds 75% of a realistic ARV, the loan is too large for the deal.
If the math does not work within reasonable program limits, tell the borrower now. Either the purchase price needs to be lower, the borrower needs to bring more equity, or the ARV needs to be validated with better comps before this deal is submittable.
Some borrowers and some deals are problems from the start. Red flags:
Vague numbers with no backup. "I think the ARV is around $400,000" with no comparable sales to support it. Real investors know their numbers.
Unrealistic timeline expectations. "I need this to close in 4 days." Sometimes true, but often a sign the borrower has not planned ahead and wants you to solve their poor planning.
The borrower has already been to multiple brokers and been declined. Find out why. Sometimes a declined deal is fine — the previous brokers just did not know the right lender. Sometimes it is a deal that no one will fund for a legitimate reason.
The borrower does not have an LLC or entity. Not automatically disqualifying, but most hard money lenders require entity borrowing. A borrower who does not have one yet adds a step.
The numbers only work if everything goes perfectly. No contingency in the rehab budget, an ARV at the top of the comp range, and a planned resale timeline that assumes a hot market. These deals exist on the edge of feasible.
Pressure to misrepresent anything. If a borrower asks you to shade a number, inflate an experience history, or submit documents that do not match reality, walk away. Not your deal anymore.
Saying no to a deal is part of the job. The best brokers say no to more deals than they submit — and they close a higher percentage of what they do submit.
When a deal does not work, be specific about why:
A specific "no" with a clear explanation is more useful to a borrower than a vague "I don't think this will work." And a borrower who understands why a deal did not work often comes back with a better-structured deal — or a referral.
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