BiggerPockets

Jarrett,

It is important to start looking for financing before making any offers. Being pre-approved can help you obtain a lower purchase price, allow for a quicker closing, and save a lot of time.

Hard money typically is an investor or company that has money that they are willing to lend to investors to purchase real estate. Typically hard money lenders prefer 6 - 12 month terms and have high interest rates, this is because they do not usually have any type of credit check. Whether they lend or not will usually be determined on the property. Often they will ask to see some sort of appraisal and home inspection. Once you get a hard money lender on board they are able to close quickly. I've work a hard money lender that has closed in as little as 24 hours. (This is not typical, usually hard money lenders require 7-10 minimum for due diligence reasons.)

Private money typically comes from private lenders. Typically these private lenders require more documentation and have more requirements for the borrower, however they are more forgiving than conventional lenders. Depending on the private lender requirements vary, however do aspect to provide a credit report and there to be a minimum down payment amount. Interest rates for private lenders vary, however it's typically 1-2 points higher than going rate.

The best way to find these types of lenders is by telling everyone you know what you are looking for. Eventually you will tell someone that knows these types of lenders/investors. You can also post ads on the free websites like Craigslist and backpage, let people know you are looking for money and they will find you.

Hope this helps some! Look forward to networking with you more!

Jarrett:

You said: >>After everything I have read I am leaning towards Fix and Flips.<<

Hopefully you have STUDIED your particular market CAREFULLY. Not every market supports fix and flips.

In my market, for instance, fix and flippers are now losing their a$$es big time.

Are you sure you want to try to rehab it yourself and sell it? Why not just wholesale the houses and let someone else take the risk and hassle?

But to fund it yourself, I've had the most luck with private lenders and bank lines of credit. Since I got set up with those, there's no going back to hard money loans.

Jarrett,
First off, I would suggest flipping contracts until you have enough to buy your own deal with your own cash. If you just can't wait, it is the availability of the cash that is important, not the cost. as long as you can get in and out quick, rate should not matter much. Good luck!! :mrgreen: