Pros and cons

10 Replies

Hello team!

I am desperate to begin investing, and because I want to buy and hold and I have a most reliable source of excellent tenants, it doesn't make sense as to why I'm still here on the couch. I Have 6k cash and want to know the pros and cons of using a hard money lender to help me make a down payment on possibly a duplex. I'm in the greater Phoenix area. So what should I do? Wait or go for it?

Most Hard Money Lenders are looking for a quick turn-around in their cash. So unless you can pay them back quickly, I would just save as much money as possible for the next year, while studying on various methods of real estate investing and networking with other investors in your area.

By the way, asking essentially the question in multiple threads will not get any more or better answers.

@Andrew LeBaron ... Go for it!! Once you start it gets easier to move forward... Don't get stuck on HML rates because rent will cover. Creative opportunities come with experience....

@Rolanda Eldridge hit the nail on the head about activity. Perhaps you should wholesale or flip a couple homes to get sufficient funds for your first B&H. That's the usual way people get in the residual game


Use your 6k for marketing for possible wholesale deals, don't sit on the money put it to work for you. Hard money lenders are looking for a quick turnaround on their investment so using hard money for a B&H is not feasible. Get started with that would be a great way to begin.

My peers are absolutely right on all accounts. Networking with other investors and gaining knowledge on fiscal options is essential - but it gets you no closer to your goals until the rubber hits the road. Build some confidence with a solid knowledge base and networking with your peers than step out and succeed. Every chance we take and opportunity we build is another learning opportunity and step forward.

Matthew McKee, RE Pro
E-Mail: [email protected]
Telephone: 307.640.4333

@Marcus Maloney how would I pitch a marketing campaign to attract a wholesaler or a wholesale deal?


You can start with a yellow letter champaign for multifamily units, or absentee owners of SFR. Search the forums for yellow letter marketing, there are numerous REI marketing pros in the community. That is a great way to start. This will get you familiar with negotiating, gauging movitivated sellers, and analyzing deals. Educate yourself because that 6K can go fast in this industry.

"enjoying the journey"

@Andrew LeBaron - love the attitude! If you want to buy and hold then you might not need as much as you think you need. I bought an 81k house with 10% down via a HomePath loan program. All in it cost 12k (down pmt + inspections + closing costs). Note: I also needed reserves to get approved on the mortgage.

Perhaps you look at properties in your area that are a lower price point (30k - 50k) and see if you can get financed. I'd stay away from hard money unless you plan on flipping the house but, even then, I'd tread carefully if you don't have the experience with fixing up properties.

I would say a guy like you would do very well as a bird-dog and Arizona and Phoenix is full of opportunities. It does not really cost anything to set up and generates cash flow on a results basis. If I needed to start somewhere knowing what I know now, it would be here. Good luck!

I'm going to take a different approach here. First, do you own your home? I'm a firm believer in action, but let's back up a step and make sure that you are ready to pull the trigger on something like a duplex.

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