Lender · Mokena, IL · Member since 2014 · 1k+ posts · 261 votes
6y
Pedro,
I am not sure what you mean by not having a lot of money, but as a first time investor you will mostly likely need skin in the game. Probably 20% of acquisition + rehab. If you don't have 20% you should look for a partner. The loan type is rehab and the best place for a new investor to get a rehab loan is a hard money lender. Best of luck to you.
Before you determine what type of loan you want to work with, you should think ahead. Think of the exit strategy. How am I going to sale this property, have you studied the market? How long will the rahab take? thinking ahead helps a lot, especially for a novice flipper.
Also, Prepayment penalties can be rough on someone with "not a lot of capital", determine sale time, rehab cost, and more importantly can I afford to flop on this project? If you don't have a lot of money try to look for a partner as Bob Greene suggested. If it's your first time flipping don't do it alone its ok to split profit. hope this help. best of luck.
Realtor · Southern NJ · Member since 2017 · 188 posts · 68 votes
6y
@Pedro Bartolomei
Hey Pedro, I think combining unsecured lines of credit with your hard money / construction loan is the best way to go as it allows you to invest without using any of your own $$ and i Like someone else said, the numbers have to work and you should have an exit strategy like doing a flip or brrrr'ing it.
Rental Property Investor · Deer Park, NY · Member since 2020 · 64 posts · 15 votes
6y
@Chris Teti I've heard that strategy before but I'm worried about the high interest on those hmls ( hard money). Fund and grow was suggested thru a friend but the start is around $4000 . Do you think that buisness credit worth it