I saw this was an older post but the subject is so important that I felt it warranted a response. If you purchase a home with a Hard Money Loan (HML) the HML will likely be lending to you 70%-80% of the ARV on the property. It does depend on the lender, the property, and the exit strategy....meaning, how will the HML get their money back. A flip is a treated just a little different than a buy-and-hold. Since you are seeking to buy and hold it will likely be that a HML will lend you 70%-75% of the value. This is important because when you refinance into a conventional mortgage you will be limited to 75% of the value of the property (if the property is a Single Family Home). So right off the bat the loan won't be eligible for cash out refinancing anyway since you are already to the "Loan to Value" limit of a refinance (a purchase has a different LTV). But for arguments sake, let say you did get this home at a steal and only financed 60% of the After Repair Value....you would actually have to wait 6 months to get cash out of the property with a conventional loan. So it is the better plan to make sure that you have as little cash out of your pocket when using a HML. If you purchase with cash there is an entirely different strategy. Also though, you could go over this 75% ARV rule with a "porfolio" loan. A portfolio loan is a loan that comes from the bank's own portfolio of money. A conventional loan is governed by Fannie Mae and Freddie Mac (if you recognize those names) and when you get a conventional loan it's not coming from the bank it's actually coming from those entities. But since a portfolio loan will be governed by the bank itself that means that each and every bank has a different portfolio loan BUT it could go above the 75% ARV. However, you will have a higher interest rate, or a variable rate, or maybe the term is a 20 year term...which would make your monthly payment higher, and etc. I've actually seen some portfolio loans with all 3 of those differences on one loan. Please DON'T hear what I'M not saying...I'm NOT saying portfolio loans are bad. They are very good loans and help a lot of people. But if someone says "my loan is 5%"....just make sure and see those other terms too. 5% might be true but it might be variable, etc. Hope this helps!