I recently decided that Id like to start Fix/Flipping in Las Vegas area. I sold my CA SFH and my AZ Investment property which netted me about 250k. Should I use my own money to start purchasing and rehabbing or a hard money lender? Any advice is great advice at this point.
What do you think?
Thanks in advance
Use your own money of course. Then bank loans. Hard money lenders are the "buy here pay here" people of this business. Way too expensive.
I go opposite debt is good when used for real estate investments especially at the right numbers... It's all about leveraging your money man.. Why close on just one when you have enough to get two or three done
I would use my own money!
You only make a deal when you KNOW it is a good deal, so that eliminates a lot of potential things going wrong.
Thi is about making money with the minimum amount of risk right?
Other people's money is expensive, so you make less money.
The risk issue... you can do a lot to minimize the risk. So if you then look at the facts, using your own money is the better option!
@Erik Schneider I would use my own money first, then I would use Banks money, then friends money, then hard money. I'm still using my money and bank's money which has been working. That 250K can go a long way if you use it right. Good luck
Originally posted by @Erik Schneider :
@Jerryll Noorden that makes perfect sense. If I were to use my own money then I’d be more risk averse rather than buying whatever I can get my hands on.
Yup, exactly. That too yes!
Originally posted by @Jason D. :
@Erik Schneider I'll counter point and say, use hard money. Think of it this way... you find a great deal, use your own money, then realize that you made a $30k error, and it's now a bad deal that you'll lose money on. There was no one to say "what about this?". With a hard money lender, you have someone else, and likely a team of people looking at the deal, making sure it makes sense. They won't lend you money unless they agree with you that it's a good deal. I would like the second and third set of eyes on my deals, especially until I have more experience.
that's a good point if you don't have much experience in fix flip, and you're in one of the most competitive markets in the country at moment, and you sold some longterm holds.....and you have cash to dig self out of mistake..
Hi Erik. I fully believe in the power of leveraging your money. That being said, hard money loans are pretty expensive and I would suggest pursuing a bank loan instead if at all possible.