A true asset-based hard money lender decides yes or no on one question: what is the property worth after repair, and does the borrower have enough margin to exit? No credit pull, no tax returns, no appraisal, no survey, no income verification, no W-2. Brent Conrad, founder of CR Lending in Prosper, Texas, runs about 120 loans and roughly $24 million against that standard, and he closes in five business days or less — two if a deal demands it.
The distinction matters because most capital marketed as “hard money” is not asset-based at all. It is hedge-fund and private-equity money with a credit floor, an appraisal requirement, and a board to report to. If the box says 620 and your borrower is at 619, that deal dies on one point.
What follows: what a balance-sheet lender actually checks, the underwriting sequence from form submission to funding, how rate and points get set, what a 6-9 month hold costs, and the property types and markets that have burned even an experienced lender.
Key takeaways
- A true balance-sheet lender underwrites the asset only — no credit check, no tax returns, no appraisal, no survey, no income verification, no W-2 — which is why a 619 FICO (or a 580) can still get funded.
- Speed comes from the owner being the underwriter. Conrad is a licensed broker who pulls his own MLS comps and forms an ARV opinion in 5-10 minutes, skipping the 5-10 day appraisal and underwriting queue. Close in five business days or less.
- Expect a 6-9 month window with interest structured into the deal. Ask the lender to calculate your total cost at month nine before you sign — Conrad does this up front as standard practice.
- Submitting a deal is also a free valuation check. If the lender’s ARV comes in $50K under yours, that is free data telling you to renegotiate or walk.
- Late-1980s to early-2000s cosmetic rehabs in primary markets carry the cleanest profit. Fully gutted 1920s houses and ‘squirrely’ commercial in thin secondary markets are where lenders and borrowers both get stuck.
From the Real Estate Pros Show
This article draws on an interview with Brent Conrad of CR Lending on the Real Estate Pros Show, hosted by Scott Bursey.
What Makes a Lender Truly Asset-Based
The test is simple: ask what documentation is required. An asset-based hard money lender working off its own balance sheet requires almost none. Conrad’s list of what CR Lending does not ask for is the clearest definition available — no credit check, no tax returns, no appraisal, no survey, no income verification, no W-2.
Compare that to the lenders who dominate search results and conference floors. Many are funded by hedge funds and private equity firms with an investment committee and a board. Their credit floors sit at 620, 640, or 660, and there is no discretion below them.
Conrad’s framing of the practical consequence:
They can’t touch somebody that has, let’s just say, a 619. One point, they won’t touch it, because they are backed by hedge funds and private equity firms that have a board that they have to report to. I’m the owner. I can make the decisions. I don’t care about one or two or four, or even if it’s a 580.
Two clarifications worth knowing before you shop.
- Credit is optional, not irrelevant. If you have a strong score and want it pulled, CR Lending will pull it and work toward better rates and terms. The point is that credit is an upgrade path, not a gate.
- Direct lender versus broker. Conrad funds with his own cash plus a handful of private backers. He does not broker deals out to third parties for a fee. That matters for certainty of close: a broker can quote you terms a funder later refuses.
When you interview a lender, ask directly whose money closes the loan and who signs off. If the answer involves a committee, plan on committee timelines.
Why Banks Can’t Touch These Deals
The niche exists because of insurability. A property with a failed roof or a compromised foundation cannot be insured, and a conventional lender will not write a loan against collateral it cannot insure on the back end. That single constraint knocks most genuinely distressed inventory out of the bank channel entirely.
That leaves three ways to buy: all cash, hard money, or nothing. Bridge capital sits in the middle of the deal’s life cycle — it buys the asset in its uninsurable state, funds the repairs that make it insurable, and then steps aside.
The full capital sequence on a typical distressed single-family deal:
- Acquisition and rehab — cash or an asset-based bridge loan, because no conventional product will touch the collateral.
- Completion — roof, foundation, and mechanicals brought to a condition an insurer will bind.
- Exit — sale to a retail buyer using conventional financing, or a refinance into a conventional loan if you are holding.
Understanding this sequence is what keeps you from shopping the wrong product. Investors routinely waste two weeks getting declined by banks on a property the bank was never going to lend against. If the roof or foundation is bad, skip that call entirely and go straight to a private lender who underwrites condition as the starting assumption rather than a disqualifier.
When you send in a deal, yeah, you’re trying to get funding, but you’re also getting a free second opinion of value from a guy that’s looked at thousands of properties over the years. A lot of times we won’t even fund the deal, because they get our opinion, I send them the data, and they back out.
— Brent Conrad, founder and CEO, CR Lending
The Underwriting Sequence, Step by Step
Here is the entire process at CR Lending, start to finish:
- Borrower fills out the form on the website.
- The submission lands directly in Conrad’s inbox.
- He pulls comparable sales himself on the MLS — he holds a broker’s and agent’s license — and forms an ARV opinion in five to ten minutes.
- He sends loan terms.
- A background check runs on the borrower to screen out bad actors.
- Borrower accepts, and the loan closes in five business days or less. Two days if the deal requires it.
Count the touch points: roughly six to eight between inquiry and acceptance, including the back-and-forth on terms. That is the whole sales cycle.
The speed is structural, not hustle. An appraisal-dependent lender has to order the report, wait for the appraiser’s schedule, then queue the file for an underwriter — five, seven, ten days before anyone can say yes. Removing the appraisal removes the queue. The person forming the value opinion is the same person authorized to commit the capital.
Two honest limits on this model. First, it misses things. Conrad has been burned and has taken losses on properties, which he treats as a cost of doing business rather than an anomaly. A fast valuation is still a valuation formed in ten minutes from comps, not a site inspection. Second, he does not track conversion rates by stage — there is no funnel analytics behind the decision, just data pulled from local markets and a background check.
For a borrower, the practical implication is that your submission quality matters. Accurate address, accurate scope, realistic ARV. The faster he can verify what you told him against the MLS, the faster your terms come back.
Loan Terms and the Six-to-Nine Month Window
Rate and points are set by what the competition is charging and what the deal will carry. CR Lending exists because of that arithmetic. Around 2013, a buyer was purchasing one of Conrad’s flips as-is and mentioned he was being quoted 14% and four points. Conrad — who already owned the house free and clear and did not need the cash — offered 12% and two points on the spot. The buyer said done. That single exchange is why the lending business exists.
The book today looks like this:
- Approximately 120 loans outstanding
- Roughly $24 million deployed
- Average loan size around $269,000
- Property types: single family, multifamily, commercial, raw land, mobile home parks, RV parks — anything with a title and a deed
- Markets: Texas and Oklahoma only
The term is a short-term bridge structured so the interest is allocated into the deal, with a six-to-nine month window to get in, execute, and pay off. That window is the operative number. It is long enough for a cosmetic rehab and a retail sale, tight enough that a gut renovation with permit delays will run past it.
The practice worth copying: Conrad calculates the total cost of the loan up front and tells the borrower exactly where they will stand at month nine. If those costs, added to the rehab, crowd the projected profit margin, he says so before closing. The borrower still decides — as he puts it, everybody’s a big boy and girl. But they decide with the month-nine number in hand rather than discovering it at payoff.
Ask any bridge lender for that number in writing before you sign.
The Free Second Opinion: When a Lender Talks You Out of the Deal
A loan submission to a lender who underwrites value himself is also a free valuation check from someone who has looked at thousands of properties. Use it that way.
Conrad’s example: a borrower submits a deal at a $390,000 ARV. His comps say $340,000. He sends the borrower the data, not just the opinion. A meaningful number of those borrowers back out of the purchase.
His reasoning is worth understanding, because it tells you whether the lender’s incentive is aligned with yours:
I don’t want to own a home or a property. I own enough of them and I’ve owned enough of them over the years. I want to be the bank for them, be a facilitator and a bridge for them to end up making money. There’s loan-to-own companies, and we’re not one of those.
That distinction is the single most useful question to ask a prospective lender. A loan-to-own operator profits when you default and they take the asset. A bridge lender profits when you pay off and come back. The second one will tell you your ARV is wrong. The first one will fund it and wait.
The same logic drives Conrad’s core deal-selection advice: you make your money when you buy. Buy at the right price and build in enough margin that a contingency — an unexpected foundation bill, a market that sits — does not erase the profit. A $50,000 ARV gap discovered before closing costs nothing. Discovered at month eight, it is the whole deal.
What Gets Lenders and Borrowers Burned
Conrad’s two most expensive lessons in 13 years of lending are specific and repeatable:
- Insufficient due diligence on a mid-construction project. Half-finished work is the hardest thing to value and the easiest place for a scope to have already run over.
- Funding “squirrely” deals in secondary markets. Gas stations, a bed and breakfast, and a 19-unit motel-to-apartment conversion in Texarkana that he now owns and describes as a pain. Odd asset classes in thin markets have no comp set and no buyer pool when things go wrong.
He also exited Tennessee and Florida entirely over foreclosure laws in those states. If a lender cannot recover collateral efficiently, the geography is not worth the yield — the same logic applies in reverse to borrowers evaluating where to buy.
The inverse of the burn list is where the clean profit sits. In Conrad’s assessment, the best fix-and-flip opportunity is a late-1980s to early-2000s house needing a cosmetic rehab — brass fixtures, carpet, stainless appliances — with room in the budget for a foundation adjustment or partial roof. Fast to execute, few unknowns, in a primary market where product moves.
The opposite profile is a fully gutted 1920s house in a secondary or tertiary market. Massive project, many things that can go wrong, and slow absorption when you list it. In Texas, “secondary market” means rural farming country, not a dense infill submarket.
Underwrite these big-ticket surprises into every rehab budget: roof, foundation, and AC as the major line items, plus asbestos, termites, and mold on older housing stock. Any one of those, missed at inspection, can take a six-month cosmetic flip past the nine-month payoff window.
Frequently asked questions
Can I get a hard money loan with a credit score under 620?
Yes, from a true asset-based lender. Credit minimums of 620, 640, or 660 come from lenders backed by hedge funds and private equity firms that answer to an investment committee. Those floors are absolute — a 619 is declined on a single point.
A lender using its own balance sheet has no such constraint. Conrad has stated he does not care whether a borrower is at 619, 615, or 580, because the loan is secured by the asset and he is the decision maker. If your credit is strong, some lenders will pull it voluntarily and offer better rates and terms, but it is an upgrade, not a requirement.
How fast can an asset-based lender actually fund a deal?
Five business days or less is realistic, and two days is achievable when a closing deadline demands it. CR Lending quotes a week publicly but works to five days.
The speed comes from eliminating the appraisal. An appraisal-dependent lender must order the report, wait for the appraiser’s availability, and then queue the file for underwriting — typically five to ten days before a decision exists. When the owner is a licensed broker who pulls comps himself and forms an ARV opinion in five to ten minutes, there is no queue to sit in.
What documents does a true asset-based lender require?
Very little. At CR Lending the full requirement is a completed inquiry form on the website with property details, after which the lender pulls comps and runs a background check on the borrower to screen out bad actors. That is the underwriting file.
Explicitly not required: credit check, tax returns, appraisal, survey, income verification, or W-2. If a lender advertising “hard money” asks for bank statements, two years of returns, and a full appraisal, you are dealing with institutional capital wearing a private-lending label.
What loan term should I expect on a fix-and-flip bridge loan?
Six to nine months is the standard window on an asset-based bridge loan — enough time to acquire, renovate, and either sell or refinance into conventional financing. Interest is typically structured so it is allocated into the deal rather than paid out of pocket monthly.
Before you sign, ask the lender to calculate total cost and tell you exactly where you will stand at month nine. Conrad does this as standard practice and flags it when the combined loan cost and rehab budget crowd the projected margin too closely. If those numbers leave no contingency, the deal is too thin regardless of the ARV.
What return do private lenders pay their capital partners?
CR Lending pays 8% to its private capital partners — the individuals whose funds sit alongside Conrad’s own cash in the loan book. That is a passive position in a fund that carries roughly $24 million across about 120 loans, with the lender handling origination, servicing, and any recovery.
The spread between what borrowers pay and what capital partners receive is the lender’s compensation for underwriting, servicing, and default risk. Conrad built his investor pool entirely through word of mouth and referral rather than a formal capital raise.
The bottom line
Before you shop rate, shop structure: ask the lender whose money funds the loan, who has authority to approve it, and whether an appraisal is required. Those three answers tell you more about whether you will close in five days or five weeks than any quoted point spread will.
