Hard Money Lending for Beginners?

Question

I’ve read some material that says starting out with Hard Money is not a good idea. Does anyone know why this is? My main strategy will be BRRRR and I plan to incorporate hard money into my financing.

Thanks for your input!

Sean McDonnell · Answer

Generalizations like 'starting out with hard money is a bad idea' are misleading and add to the analysis paralysis a lot of people struggle with. Each real estate deal is unique and requires the investor to solve different sets of problems.

I would say it is harder to get hard money for your first deal because you do not have a proven track record but it is not impossible. But if you present your deals in an organized and professional manner, I am sure you will be able to find someone who will lend you money. How many hard money lenders have you talked with?

Cameron Tope · Answer

Dalyn,

Hard money is not a solid long term strategy as it's expensive but it's not a bad idea when starting out.

Solid hard money lenders will vet your deal and have a business of lending money so you have some assurance knowing they'll close.

I started out using hard money then after doing 5 deals I had a track record to attract reputable private money lenders.

If you end up going with private money to start make sure you talk to a few people that have done business with them, as having a unprofessional or new PML can result in a lot of headaches.

Hope that helps!

Dalyn Hazell · Answer

@Sean McDonnell None yet, but your answers have given me the clarity to move forward. Thanks all!