Do you leverage your money using hard money? Why or Why not?

3 Replies

Hello Everyone!

I've been running into a good amount of investors lately at the office who have told me that they don't use hard money lending and don't want to give it a try. I understand using cash for a transaction you're probably going to make a larger net profit but does that out weight the benefit of keeping your assets liquid and being able to do more projects?

Me personally I would rather make a little less on each project but do a greater number of deals than essentially putting all my eggs in one basket and hoping for the best. 

I'd love to hear all of your thoughts and experiences about this subject. 

Thanks!

Originally posted by @Andrew Nguyen :

Hello Everyone!

I've been running into a good amount of investors lately at the office who have told me that they don't use hard money lending and don't want to give it a try. I understand using cash for a transaction you're probably going to make a larger net profit but does that out weight the benefit of keeping your assets liquid and being able to do more projects?

Me personally I would rather make a little less on each project but do a greater number of deals than essentially putting all my eggs in one basket and hoping for the best. 

I'd love to hear all of your thoughts and experiences about this subject. 

Thanks!

 It probably stems from a lack of or comfort with exit strategies, the unknown, and knowledge of finance and how to use leverage to their advantage. Knowledge usually helps curb fear and of course experience curbs fear as well, at least from what I've seen.

Hello 

Having an exit strategy is key. If you would like to do mulitiple deals per year or even multiple deals at a time i see it as an amazing option.  You can even poentially do a cash out refi using hard $ mid deal usually at 50% ltv and not have to sweat about your deal closing on time. I personally stress way too much when all that $ is out there. When you add the "90 day" seasoning day rule and building departments,  unforseen problems, etc. You can potentially be 120 days out or more before you can see your initial investment. Just my two cents

Good luck

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