Updated almost 8 years ago on . Most recent reply
Hard Money Vs Cash (Flipping Single Family Homes)
Hello Everyone!
Just so you get an idea I flip single family homes. Sometimes I do complete tear downs and rebuilds and other times I do gut renovations and/or additions (depending on what the situation calls for).
Up until this point I have been doing 1 deal at a time and as a result been using 100% of my own cash to fund acquisition, holding & renovation.
As a result I can only do one deal at a time because I am in an expensive part of the country.
The debate going forward is continue using my own cash (in total control, no interest, can make more competitive offers to acquire properties, higher $ amount returns, no contractor draw requests/inspections to deal with throughout entire project) or turn to a HML who is going to cost me around 10-11% with 2-3 points interest only loan with no pre-payment penalties (much less cash out of pocket, high cash on cash % return, potentially do multiple projects at once).
What are your thoughts on this debate I am having?
Look forward to hearing from everyone and great success to everybody on their ventures!
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