After spending over a decade funding real estate deals in Richmond and Norfolk, I’ve seen the same mistakes cost investors thousands of dollars. Most of these failures stem from misunderstanding what hard money lenders actually require. The truth is, our requirements exist for YOUR protection as much as ours.

I opened Friendly Rehab Funds after attending a REIA meeting where 40 out of 45 investors said their biggest obstacle was financing. That experience taught me something fundamental: investors need more than just capital. They need a partner who understands the local market and won’t let them walk into disaster.

Virginia Hard Money Loan Requirements: What You’ll Learn

The Real Numbers: Down Payments and Capital Requirements

My down payment requirements often are lower than most national lenders. Commonly they range from 12-15%.

Beyond the down payment, you need reserves to cover unexpected expenses. Why? Because renovations commonly cost more than expected. Investors need to be able to handle a $10,000 surprise without defaulting on their loan.

For new construction projects, which have become huge in our market lately, the capital requirements are different. I’ll stagger funding the Construction Escrow to save you interest costs. Instead of putting $300,000 in escrow on day one and paying interest while waiting for permits, I’ll fund in 4 stages. First draw at typically 45 days after closing, with funding for the remaining portions funded in 45 day intervals. This approach has saved my clients thousands in carrying costs.

Ready to see if you qualify? Complete our free application and I’ll review your situation within 24 hours.

Experience Requirements (And How to Qualify Without It)

Experience matters, but not having it isn’t a dealbreaker. I finance first-time investors regularly. The difference is the type of project we’ll approve. If you’re new and want to tackle a 100-year-old house in Church Hill that needs complete systems replacement, I’m most likely going to counsel you out of it. But a cosmetic flip on a 1990s house in Midlothian? That’s doable for a beginner.

What really matters is your team. When someone tells me their contractor is “my buddy Billy who did work for someone I know three years ago,” that’s a red flag. But if you say, “I hired the contractor who handles renovations for an investor who owns 30 rentals in the Fan District,” now we’re talking. Your contractor can make or break your project, especially on your first deal.

I also give weight to related experiences. Maybe you’ve never flipped a house, but you’ve managed commercial construction projects. Or you’ve owned rentals for years but want to try flipping. Possibly you are a Realtor and have office connections to proven contractors. These backgrounds count.

Last week, I spent an hour and a half on the phone with a woman who was a member of a national women’s investment group. She had 20 prepared questions about hard money lending. After going through everything, I told her she didn’t have enough capital to start. But I also told her she qualified for a $175,000 HELOC on her primary residence. That’s her entry ticket to this business. Sometimes the best advice isn’t about my loans, it’s about finding the right path forward.

Property Standards That Make or Break Your Deal

The property is my collateral, so yes, I care deeply about what you’re buying. But my evaluation goes beyond protecting my investment. I’m protecting yours too. In the last year alone, I’ve counseled four to six experienced investors out of deals where they would have lost $100,000 or more. Two ignored my advice. They lost a substantial amount of capital.

The biggest issue in our markets? Old houses. Richmond and Norfolk are full of 100-year-old properties that look like bargains. You see a house for $150,000, figure $50,000 in renovations, and dream of selling for $400,000. Here’s what you’re missing: if the plumbing and electrical haven’t been updated, you’re looking at a substantial increase in renovation funds needed. Add foundation issues, which are common in Norfolk due to soil conditions, and your profit just evaporated.

My first question on these old properties is always: “Has it been renovated before?” If you don’t know, my next question is about the mechanicals. If the wiring and plumbing haven’t been replaced, I won’t fund it unless you have an adequate budget for a complete renovation job. This isn’t me being conservative. This is me keeping you in business.

After repair value is where most investors fail. They use Zillow estimates or pick comps from different neighborhoods. I provide free ARV evaluations, usually the same day you call. No charge, whether you’re a customer or not. Why? Because accurate valuations prevent disasters. Appraisers, or “appeasers” as I call them, often miss the mark for investor purposes. They’re trying to justify a purchase price, not determine actual market value for a flip.

Documentation Checklist for Fast Approval

Speed is everything in hard money, but disorganized borrowers kill their own deals. I can fund in 3-5 days if you have your paperwork ready. Here’s what I need:

For Your Entity:
Articles of Organization for your LLC
Operating Agreement
Certificate of Good Standing from Virginia
EIN letter from the IRS

For You Personally:
Driver’s license
Personal financial statement
Brief description of your real estate experience
A completed quick and easy funding application

For the Property:
Executed purchase contract
Detailed renovation budget
Title ready and cleared for closing

Credit scores matter less than you think. I pull credit, but I’m not looking for perfection. Hospital bills? Student loans? I don’t count those against you. Recent bankruptcy or foreclosure? That’s different. But even then, if the deal is strong enough and you have sufficient cash reserves, we might work something out. Most hard money lenders want to see at least 620-660, but for me the property matters more than your FICO score.

Contractor Requirements That Save Your Project

Contractors can put even smart investors out of business. I’ve seen it happen too many times. That’s why I dig deep into your contractor relationships. If you tell me you’ve used this contractor on multiple projects, perfect. If you hired them based on a Craigslist ad, we have a problem.

I never fund contractor deposits. No legitimate hard money lender does. Contractors who demand large upfront deposits can disappear with your money or delay project completion as they juggle other projects.

Our fast draw system helps our investors negotiate lower deposit requirements with their contractors. You submit photos of completed work, I commonly fund the draw the same day, usually by 3 PM if you submit by 10 AM. No other lender I know funds this fast.

For new investors, I sometimes help find contractors. I’ve been in these markets for over a decade. I know who delivers and who doesn’t. This isn’t part of my official services, but if it helps you succeed, I’m happy to make introductions.

One more thing about contractors and draws: I don’t charge inspection fees. Most lenders charge $150-175 per inspection. On a major rehab with 15 draws, that’s over $2,500 in fees. I absorb that cost because nickel-and-diming successful investors is bad business. I’d rather you use that money for quality finishes that increase your sale price.

Richmond vs Norfolk: Market-Specific Considerations

Richmond and Norfolk might only be 90 miles apart, but they’re different worlds for real estate investors. In Richmond, the challenge is historic districts. Properties in the Fan or Church Hill can be goldmines, but only if you understand the renovation restrictions. The historic commission can delay your project by months if you don’t follow their guidelines. I’ve funded a number of these projects and have a good understanding of the challenges of renovating in these areas.

Foundation issues are a big consideration in The Greater Norfolk Area due to soil conditions. Always, and I mean ALWAYS, get a foundation and termite inspection there. These aren’t optional. I’ve seen beautiful flips sit on the market for months because buyers’ inspections revealed foundation problems the flipper missed.

In Richmond, the issue with older homes is different. You’re dealing with lead paint, asbestos, knob-and-tube wiring. Budget for abatement. If you’re looking at a house built before 1978 that hasn’t been renovated, add $20,000 to your budget just for safety.

Market velocity matters too. Richmond properties typically go under contract in 19 days. Norfolk takes 36 days. This affects your exit strategy timing. In Richmond, you can often sell before your first payment is due if you price it right. In Norfolk, plan for a longer hold.

Need help evaluating a specific property? Submit your property details and I’ll provide a free ARV assessment within 24 hours.

VA Real Estate Investor

Costly Mistakes I’ve Stopped Investors From Making

Two weeks ago, an investor showed me a lot for new construction deal outside of Charlottesville. Great area, but this specific development had one house sold in the past year with four sitting on the market and nine lots with builders begging for buyers. I told him he’d lose money and counseled him out of buying a lot.

The most expensive mistake I see? Investors falling in love with the deal instead of the numbers. A property on Chamberlayne Avenue in Richmond looked perfect on paper: buy for $160,000, renovate for $30,000, sell for $250,000. The investor ignored that it faced a high-crime apartment complex. Real value? Maybe $160,000 after renovation. That’s a $60,000 loss before you factor in holding costs.

Another killer mistake: using list prices as comps instead of sold prices. The MLS shows what sellers want, not what buyers pay. In this market, the difference can be 10-15%. We base our ARV on closed sales from the last 180 days in close proximity to the subject property, or go back a year if needed to make sure comps are truly comparable.

Overleveraging is tempting when lenders offer 100% financing. But what happens when your contractor finds mold in the walls? Or the market softens while you’re renovating? Keep 10-20% of your total budget in reserve. I’d rather see you do fewer deals successfully than stretch yourself thin and lose everything on one bad project.

The worst mistake? Taking too long to complete a project. If you don’t have a clear plan to sell or refinance within a six to twelve month timeline, interest fees can have too big of an impact on your profit margin. This is why it’s so important to understand and adhere to a project’s schedule.

Your Next Steps

Success in real estate investing isn’t about finding the perfect deal. It’s about avoiding the bad ones while moving quickly on the good ones. In my experience, preparation makes the difference. Build your contractor relationships before you need them. Get your financing lined up before you make offers.

I take calls seven days a week (except Sunday mornings). Why? Because when you find the RIGHT property on Sunday, you need answers immediately to make a competitive offer. Two weeks ago, I did an evaluation on a Friday night. My wife wasn’t happy, but the investor saved $50,000 off the asking price because I helped him structure his offer correctly.

The Richmond and Norfolk markets are heating up. Inventory is up 20% year-over-year in Norfolk, and interest rates are finally coming down. This combination creates opportunity, but only for prepared investors. The deals will move fast. If you’re not ready with financing, entity structure, and a solid team, you’ll watch others profit while you’re still getting organized.

Remember, I named my company Friendly Rehab Funds for a reason. Every person in my office is a Licensed Realtor who understands investment properties. We’re not just lenders. We’re partners in your success. When you call, you’ll talk to someone who can actually help, not a call center employee reading a script.

Ready to get started? Complete our application today and I’ll personally review your situation. Even if you’re not ready to borrow, I’ll tell you exactly what you need to do to qualify. That’s how I’ve built my business: straight talk, fast funding, and treating investors like family.

The best time to enter real estate investing was 20 years ago. The second best time is now. But only if you understand the requirements, prepare properly, and work with a lender who has your back. In Richmond and Norfolk, opportunity is everywhere. The question is: are you ready to capture it?