Hard money to conventional

3 Replies

Curious what the thought is on obtaining a hard money loan to purchase a home quickly at 12% and 2 points, then immediately refinance with conventional at 4.5%.. The conventional loan will include the rehab costs of the flip or hold property depending on which route I go. Would love to hear everyone's opinion on this, good or bad. Thanks!

Why not go straight conventional if the property qualifies?

@John D.  I have thought of that but timing is everything so it will take much longer to fund a conventional loan opposed to hard money. Also if I can come with 10% down initially rather than 25% it would be my preference. 

The only downside I see with this is that you're paying twice for money you're borrowing. As you mentioned it also gives you time to gather your higher down payment. I think it's a great idea to go with a lender that will get you the deal quickly. In my opinion it's better to have a deal than lose it with financing that takes times...as long as you're making money. So I would do all the calculations upfront to see that if the expenses of Hard Money at first will still give you the profit you're looking for in the end.

Hope that helps!

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