Flipping biz funding model
Hi folks,
We are starting up a rehab resale operation in Houston. Our first deal will be done with hard money. We are bringing some skin into the game as for this flip we did not meet a 70% Ltv. It's becoming apparent this will not be a sustainable funding model, as it brings in need for additional funds outside the original hard money loan. We intend going forward to seek out deals where we could meet the 70%Ltv consistently, which should hopefully allow each loan to fund the entire deal and keep our bucket of operating costs and holding costs much simpler. Plus it just seems like a better way to do business especially since we want to transition to private money long term.
Would be grateful for thoughts from the crowd; any other ways of doing it which have worked out for people. Is it possible to run this type of operation by getting gap funding frequently or does that strategy become unsustainable at some point? Plus, how sweet is 2nd loan position for such lenders?
Thanks for your thoughts,
Judd