Financing first flip- hard money vs. Groundfloor

[Michael Davis]

What's the best way to finance a first flip? I understand that hard money is relatively easy to get but has high fees that could eat into profit. Crowdfunding sites like Groundfloor seem to have lower fees but I suspect they would take longer for approval and funding. Any advice on which is best?

[Jeremy P.]

There is not a single best way.

If you plan on living in the house FHA or 203K loans are good, low down payment, 3.5%.

Conventional is probably out since the house must be in livable condition before the lender gives money. 20% down payment

Private Money could be next, 0 - 8% rates (local investors, Friends & Family, even Investors on BiggerPockets, etc.) 30% down payment could be required

Local Banks, Credit Unions are a good source.

Portfolio Lenders would be good also 7- 10% rates, most don't require income verification but almost everyone checks Credit with 660+ being the average. 30% down payment could be required

Then there is Hard Money 10 - 16% rates, fees/points, not sure on the down payment

Brief Overview of Financing:

The Best Beginner’s Real Estate Investing Course Online

Module 6: Real Estate Financing

I've been working on Personal Lines of Credit, Home Equity Lines of Credit, and Saving up Cash this will help with down payments, and Rehabbing, etc.

I'm currently working on Portfolio Lenders to fund the rest of the Flip, or Refinance,even thinking about having them Fund the Buy & Holds and then refi afterwards.