How to Evaluate Real Estate Deals Like a Lender: What We Look For Before Funding

When it comes to hard money lending, success hinges on more than just numbers. At QuickDraw Lending, we’ve funded hundreds of deals across multiple states—and we’ve seen firsthand what separates a solid investment from a risky gamble.

Whether you're a seasoned investor or just starting out, understanding how lenders evaluate deals can dramatically increase your chances of getting approved, and more importantly, staying profitable.

Here’s what we look for before saying “yes” to a deal:

1. The Asset Itself (Is the Property a Good Investment?)

Hard money is asset-based lending, so we start with the property. We evaluate:

• Location: Is it in a strong, stable, or up-and-coming area?

• Property type: Single-family, multifamily, commercial—each comes with different risk levels.

• Comparables (Comps): What have similar, nearby properties sold for recently?

• Condition: Is it a cosmetic rehab or a full gut job?

  
  

If the property has upside potential and sits in a viable market, you’re off to a good start.

2. The ARV (After Repair Value)

This is one of the most important metrics we review. We want to know what the property will be worth after renovations are complete.Your ARV should be based on solid comps, not wishful thinking. The more accurately you can support your projected value, the more confidence a lender has in the deal.

At QuickDraw Lending, we often lend based on ARV rather than current value—giving you more flexibility to grow.

3. The Budget and Scope of Work

A vague or unrealistic renovation plan is a red flag. We look for a detailed breakdown that includes:

• Labor & material costs

• Timeline by phase

• Contingency buffer

  
  

If your numbers are too low, it signals inexperience or wishful planning. Too high, and you might be over-improving beyond the area’s ceiling price. An accurate, realistic scope sets the tone for the entire loan.

4. Exit Strategy

Lenders need to know how you’ll repay the loan. We’re looking for:

• Flip & sell: Is the market strong enough to support a quick sale?

• BRRRR (Buy, Rehab, Rent, Refinance, Repeat): Will the property cash flow and qualify for refi?

• Rental hold: Will it appraise and cover expenses with margin?

• Wholesale exit: Do you have a buyer ready?

  
  

The stronger your plan—and your backup plan—the better.

5. Skin in the Game

Hard money doesn’t typically fund 100% of the deal. We want to see that you have:

• Cash to cover the down payment or renovation

• Equity in the property

• A financial cushion for overages

  
  

This tells us you’re invested in the success of the deal—not just hoping the lender takes all the risk.

6. Borrower Experience & Reputation

We don’t just lend to the deal—we lend to the person behind it. We ask:

• Have you done similar projects before?

• Do you have a good team (contractors, agents, property managers)?

• Are you organized and prepared?

  
  

Newer investors can still get funding, especially if they surround themselves with experienced professionals and present a solid plan.

Final Thoughts

If you can think like a lender, you’ll set yourself apart in the investing world. We’re not just looking for perfect properties—we’re looking for smart investors who understand risk, plan for success, and are serious about their goals.

At QuickDraw Lending, our goal is to be more than just your lender—we want to be a strategic partner in your real estate journey. Present your deals clearly, back them with real numbers, and stay transparent and we’ll be ready to help you fund your next investment.