Hard-Money vs. Bank Debt vs. All-Cash: Which Strategy Maximizes ROI for Residential Flips?

Introduction: The Capital Strategy That Sets You Apart

At 1st Private Capital, Inc., we understand the biggest decision real estate investors face after finding a promising flip isn't about the design, it’s about the financing.

Let’s say you locate a fixer priced at $750,000 that needs $200,000 in renovations and can sell for $1.3 million post-rehab. Do you pay all cash, use a bank loan, or leverage a hard money loan from 1st Private Capital, Inc.?

This scenario-based breakdown reveals how each path affects return on investment, cash efficiency, and scalability, and why hard money often outshines traditional financing.

Scenario: One Project, Three Ways to Fund It

• After-Repair Value (ARV): $1.3 million

• Rehab Budget: $200,000

• Original List Price: $750,000

• Discounted Price (via hard money speed): $675,000

Your Three Financing Paths:

1. Hard money Loan from 1st Private Capital, Inc.

   • 35% down

   • 10.5% interest-only

   • 2 points up front

   • 10-day, no-contingency close

2. Conventional Bank Loan

   • 20% down

   • 7.25% 30-year amortized

   • 1 point

   • 30–45 day escrow

3. All-Cash

   • No financing costs

   • Must match the 10-day, non-contingent close to earn the discount

Acquisition & Carry Costs Over 8 Months

Selling Outcome: Net Profit & ROI

1st Private Capital, Inc. Insight: The 10% discount secured with a fast, non-contingent close using our hard money loan makes it the highest-yield strategy, despite higher financing costs.

Deploying Your Capital Efficiently

Many of our clients at 1st Private Capital, Inc. want to know: If I have $950K in capital, should I flip one house with cash, or multiple with leverage?

With 1st Private Capital, Inc.’s hard money loans, the same capital doubles your project count, and more than doubles your profit.

Why Sellers Value Speed, and You Should, Too

By offering a 10-day, non-contingent close using funds from 1st Private Capital, Inc., investors secure:

• Bigger Discounts: Sellers often cut 5–10% off for speed and certainty

• Faster Deal Flow: Close quickly, rehab, sell, and move on to the next

• Less Competition: Win deals that traditional buyers can’t compete for

What to Watch Out For

While 1st Private Capital, Inc. empowers investors with high ROI potential, successful leveraging also requires discipline:

• Holding Risk: Every month adds ~$3,800 in interest

• Market Softening: Price drops hit leveraged investors faster

• Execution Risk: Two flips at once requires project management strength

• Exit Liquidity: Be sure you can refinance or sell when ready

Final Thoughts: Why Real Investors Choose 1st Private Capital, Inc.

At 1st Private Capital, Inc., we equip experienced investors with fast, reliable, and strategic capital to outperform their peers. Hard money financing isn’t just about debt, it’s about leverage that works in your favor.

✅ Higher ROI
✅ More flips per year
✅ Cash-style negotiation power
✅ Faster portfolio growth

We’re not just a lender, we’re your capital strategy partner.