Hello. I am from VA and recently moved to Florida. Is a Hard Money Loan and good route to take on a first flip if you are starting out with minimal funds? I have my eye on a duplex. Under $20k, 2 units and roughly 70k in renovations. Newbie here. Really anxious but want to make the right move. My intention is to hold on to this property long term. If a hard money loan is not wise on this type of investment, please drop some suggestions!
Hard money is fine. But please remember that they don't call it hard money for nothing. I would exhaust asking all friends and family first as private is almost always easier to work with. Especially for your first investment. With that being said, plenty of people use hard money on their first deal. Just make sure you have a done all of your due diligence and you're supremely confident in your numbers before proceeding.
I used hard money for the first deal I ever did and it worked out well with a few hiccups along the way due to some inexperience. Hard money is expensive but can be a good tool to use if you are unable to raise private money. Run your numbers, and get yourself a reliable contractor that can come in on time and on budget. The one issue I ran in to was that I was unable to refinance the property (was holding as a rental not a flip) as soon as I wanted to and that can get expensive.
Few things to point out. Hard Money isn't a resource if you have absolutely no money. Most of the time they require you to perform different portions of the rehab to get reimbursed. It can be cash heavy at points. They can also dictate a lot of terms like adding in additional costs after a certain amount of days, whether to fulfill your draw request in accordance with the scope of work, etc. They will probably require somewhere between 70-80% of all in costs during your first rehab with some points. Also, any project overruns you will be responsible for if not documented originally.