A friend of mine has used hard money for flip purposes and I am considering using it for buy/hold.
My wife and I own two rental properties in the Tacoma, WA area. Both of which have been purchased through conventional loans with 15% down. They are performing well.
Is using hard money for buy/hold purposes something I should consider?
What are the pros/cons that I should consider?
The way we look at it, if hard money can enable us to purchase additional properties more easily or with less of our own cash, then it can make sense.
At this time we are actively looking for our third buy/hold. We have more than enough for the 15% down payment using another conventional loan, but if hard money can help these dollars go further then we are interested in pursuing it.
I have used hard money for distressed properties to purchase and rehab then refinanced at the 1 year mark. Basically the BRRR method but using hard money.
Thanks for the input. What is the BRRR method?
Brrrr all day every day
Buy, Rehab, Refinance, Rent, Repeat
Rent before Refinance. Helps with terms of refinance.
hard money is short term money... and expensive.. not intended for periods of over a year .. interest and points will kill any cash flow investment. stick to what your doing.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you