Hello My name is Renzo! we have heard many good and bad experiences with using hard money and private money. we are new to real estate investing and looking to do a flip soon. Before we do we just want to know what other investors have used in order to flip their deals and if you were willing to share them.
Hi Renzo, I work with different lenders that do fix n flips. It will depend on the situation, but bridge loans are pretty popular for short term. What kind of term are you thinking about?
@Renzo Tunjar That's a great question brother and as much as I hate to say this it really depends.... Starting off as a newbie with little or no experience no private lender is going to loan you money unless you know some wealthy individuals or have a good relationship with them. This leaves hard money on the table... which is not the best option but it is an option. My opinion is you should have the mentality that you are going to do whatever it takes to make things happen. Yes you may have to pay 8 points up front and on the sale and pay 15% interest but if that gets you going and puts a deal in motion and gives you that experience it is worth it in my opinion. As time goes on and you become established and have a track record you will get much better financing but to start out you will not get amazing financing. I know that sounds harsh but that's how it is. I would recommend finding a good, quality, honest and ethical lender and sticking with them. As time goes on you will build a relationship and track record and will get much better financing. Where as if you hop from one lender to the other yes they may offer 12% compared to 13% but is that 1% really going to benefit you more than building loyalty and trust with a company/lender that will save you 10% interest down the road? That's up to you. It's a matter of short term or long term thinking. If you are thinking long term it shouldn't matter, because in my opinion getting money is the easiest part of doing the flip. Worry about finding a deal and quality contractors first and foremost. Just make sure you do your due diligence not only on the property but the people who will be rehabbing it and the lender you will be using. Study, learn and listen to podcasts. Good luck brother!
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