Question on hard money loan

4 Replies

Hello i would like to start flipping soon . My question is to fund the whole flip from hard money . I grew up around flipping and holding and renting out . Do not want to hold . There is a lot of property that would be cheap . Up to 30k . ARV range is 60-70k , if i can make 5k on the first one would be fine . Would this be doable?

hard money lenders will all set their own terms. 

The most common flip fund seems to be:

12% 

2-3 points

90% LTC 

100% rehab funding

I can't comment on if the deal is good, I don't know the area. You're going to need to know that and you're going to need to convince the HML that you're right.

thanks for the reply . Im still checking the area and what the market will hold . Nothing crazy just nice older homes . Once i get closer i will  post info on some of them to get feedback. 

Originally posted by @Chris Mannon :

thanks for the reply . Im still checking the area and what the market will hold . Nothing crazy just nice older homes . Once i get closer i will  post info on some of them to get feedback. 

If you are considering a HML, consider if you can go slightly upmarket. You will probably find it easier to get a HML for say a $100k loan (including rehab) than a $50k loan. The interest and points will likely be better too. Many lenders have a loan minimum.

The reason is that it is the same amount of work for us HMLs to lend $100k or even $800k as a to lend $50k. So if I am going to devote a few days of my life to originate, process and close this loan, it has to be worth my time.

Best wishes on your RE adventures.

Ok thank you for the information.  I was looking at a lower amount to start and then progress upward. But your correct.  im still looking at the area and will go for something in the very near future.