Is hard money recommended for your first flip?

[Jake Harrington]

I've been stalking these forums for a while now and y'all are so helpful. Thought I would put out my first post :)

For background, I'm a new investor in the Houston area doing research before my first flip. It looks live ARV will be around 275k-300k.

My question is, when starting out is hard money the way to go? It seems like most investors start out this way. 

But based off the books I've been reading, such as J. Scott's book, hard money isn't always recommended and it's better to go with a portfolio investor such as smaller banks, or partnering with other investors, or of course seller financing. 

Jumping into hard money as a new investor seems insanely risky. I suppose I'm looking for any advice on how you found an alternative to hard money. 

Or on the flip side (see what I did there?), what made you feel secure taking the leap with hard money and going after that first flip.

Partnering with an investor or doing seller financing would be ideal, but I'm still growing my network by cold calling other investors and real estate agents and attending local events. Trying to build out that dream team of contractors and subs as well.

A mentor would also be super helpful, but like I said, still building out that network.

As far as my personal situation, I have a good credit score, a decent amount of savings (200k cash) and a little more than that in investment accounts along with some equity in my current home, a mortgage, and car payments.

Any advice would be greatly appreciated.

[Robin Simon]

Its definitely dependent on a lot of variables, personal situation/risk tolerance, etc.

But high-level, I would say that there can certainly be a balance - sometimes people forget that when using hard money or any sort of financing, for some reason you need to "MAX out leverage" - i.e. do a 100% financing for a flip or a max cash-out refinance etc..

However, most hard money lenders would be totally willing to do a lower leverage loan (and would probably prefer it) such as 50% or 60% LTC instead of the usual max amount.  This gives cushion and greatly reduces risks on all sides - but doesn't require you to go "all cash" or wait to save up to jump in and get started