I say try to save up some cash. Hard money is expensive money and cuts into profits.
You may also want to build a relationship with a local credit union....they may have easier loan reqs. You will still need cash for closing costs and inspections, etc..
Hi Tashinga. I am in the same boat but the thing I am working on is to find those deals with owner financing, wrap- around mortgages or lease options. Now of course you will need some monetary backing but you can also look for private money to partner with.
As a newbie, not knowing the area yet, not having any contacts or tribe; I personal would not go straight to fix/flip in this hot market with Hard Money. Financial suicide ( in my opinion).
Get here, get stuck in here in DFW, save as you go and make SMART decisions. Good luck !
@Tashinga Musekiwa welcome. 1st things 1st TAKE ACTION! this is a competitive world of REI . I suggest building up some cash either by wholesaling or your job HML will only charge fees that could be put in your pocket. get the experience in first before you start flipping with your own credit you will not be upset.
Originally posted by @Tashinga Musekiwa :
Hello everyone, so I’m a new member to BP and have been studying real estate for a few months now (attending RE local meetings, going to whole sale classes from gurus) I’m getting stuck in this weird space where I’m studying but afraid of taking action. I currently have a credit score of 720 but no cash. My question to you guys is do you think i should try and find a hard money lender for a fix and flip to start and can anyone recommend any, ill be relocating to the Dallas area soon so it will be somewhere in that area
Tashinga, unless you have a pretty solid construction background, I would recommend staying away from flipping until you get some experience. IMO the BRRR or buy and hold method is a lot more forgiving. You don't have to be as precise on your numbers, your purchase point etc, because time will erase most minor mistakes.
We lost some money on our first flip. It was a great experience, I am glad we did it, and we are a LOT better off in terms of knowing how to manage other rehab projects, and frankly it helps us a lot when evaluating new potential projects because we know what to look for and how to estimate repairs.
More or less assume your first flip will cost twice as much, and take twice as long as you initially planned. Without reserves you really run the risk of having the first flip take you down.
And IMO hard money, if you can get one as a first time flipper will be very expensive and more importantly, leverage will magnify what ever you do. It makes good deals better, and poor ones much much worse.
IMO if I was starting out with little to no money, I would house hack, and/or find a deal, then take that deal to an investor who will partner with you. Then go from there
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