What is the best way to fund a fix n flip deal with OPM? Hard Money loan and Commercial loan? BOTH? As well as the need for working Capital, business expenses and equipment?
Hi I have an Out of state property that I need to close on fast within the next few days or at least have the funds readily available to extend the Closing Date. We will then put just enough money into the property " light to moderate rehab" carpet, paint, minor updates in kitchen and bath, cleaning, professional photos, staging, and re-listing property of the OFF market property onto the MLS.
1) What is the best way to get funding for the entire property and closing cost including fees, and money for rehab?
My thoughts are to pull out a hard-money loan for the property which will cover 80% or so of the entire deal. And then pull out a Commercial loan of 100K to be split into 5 separate flip n fix properties.
Example Scenario: Property Cost 100K
Hard Money loan covers 80% and we still need funding for the remaining 20%.
For the remaining 20% we pull out another loan. A commercial loan for 100k that we can split into 5 separate future deals to cover the 20% needed on each property. And continue to pull out a Hard Money loan each time we start a new fix n flip deal that will cover the 80% each time.
Is this the correct way to go about this? To get 100% funding to make the first deal happen and then leave enough room for the rest of the deals?
2) Also the company plans on expanding and will need money for working capital, Equipment cost, and other expenses. So we will need to pull another loan out specifically for that? I just wanted to run this by some of you guys on here to make sure I'm going about this correctly, and to see what thoughts you have on securing the proper funds to operate smoothly and efficiently.