Which direction to go?
My partner and I are actively looking for our second property, a fix and flip. We've looked at and analyzed probably two dozen properties and, for the most part, we are comfortable with the estimating and analyzing part but we are struggling with the financing part. We are targeting properties at $40k-$60k with $10-$20k rehab costs. We have around $25k in cash. I see us having 4 options:
1. Conventional: Best terms I've found are 75% LTV, no rehab costs included. I've only called a handful of small, local banks so maybe there are better terms out there? It's relatively inexpensive but comes with a lot of hoops and the process can be lengthy. Homepath may be an option that we are just beginning to explore.
2. Hard Money: It's expensive, 5 points, 12-13% from what I've found. But less hoops to jump through and a quick close is possible.
3. Private Money: The wild card. No idea what terms we could agree on but a cousin of mine has money he may be willing to invest. We have a couple other potential PM lenders as well. Any ideas on the structure of a PML? Guarantee a certain return? % of profit? 7-8% with 1-2 points?
4. Borrow cash from family to pay for purchase, use credit cards to pay for part/all rehab. This option could really spread us thin but appears to be the "easiest". All cash offer, not many strings attached to the money, etc would be nice but we are uneasy about it.
Am I missing any potentials options? Have I detailed the options correctly?
Any advice which direction to go? Thanks in advance for reading!