My Fiancé and I are trying to get a rental property how does it work with Hard Money Lenders? Do you have to have positive equity in order to do so?
@Burke Fisher no, the property has to be able to cash flow, you need a decent credit score, an entity set up plus some cash for a 20% down payment and an extra buffer.
@Matthew Crivelli I have a 700 credit score, and when you say cash flow you mean the rent must be able to cover the mortgage plus some right?
Thanks for replying Matthew!
@Matthew Crivelli and we also have an LLC
@Burke Fisher Correct the amount taken in, has to be more that the note, taxes and insurance.
@Matthew Crivelli so I would just need the HML for the down payment then finance rest through a bank? And for investment properties that are used for rentals you just need to prove you have a tenant and it's covers the mortgage, insurance, and taxes? Thanks again!!
@Burke Fisher HM Lenders would supply the note. Not the down-payment. You have to go one way or the other. No matter how you slice it you will need 20% in hand.
Hard money lenders are usually used for short term flips, rather than long term rentals. Due to the high financing costs.