In search of advice for quick funding for my first flip.
Hey All, my name is Quinn and this is my first post on the forums. I am 24 years old and I did what everyone said to do, I went to school in hopes to get a degree and find a good job. I got a degree in economics and I currently work as a stock broker. Having said that, I have become very interested in real estate as a vehicle to pay off student loans, build long term wealth, and achieve financial freedom. I started by listening to the BP podcast, and reading some of the books that came up on the podcast. I am very drawn to the idea of flipping. I love the idea of seeing opportunity in something that may turn others away and bringing homes and neighborhoods back to their former glory. My goal is to get into real estate by flipping a few houses to fund long term rentals for cash flow. I am also very interested in the BRRRR strategy.
I have found two foreclosed properties for $35k in neighborhoods that I am familiar with and they seem like good deals, the renovations needed appear to be mostly cosmetic and I am currently working with my real estate agent to estimate ARV based on local comps. Having said that, my fiancé and I are getting married in May and I was planning on saving money through the winter and getting started investing after my wedding in the spring. If I were to take a shot on these deals, how would you suggest going about sourcing funding? I just bought our first home in April and with the wedding coming up, a large down payment does not seem feasible currently. I am thinking that hard money is likely my best option. What lenders do you suggest? What kinds of questions should I ask them to make sure that I am choosing the right lender? Lastly; what things can I do, besides finding a reasonable ARV, an estimate of repair costs, and finding a good contractor to convince the lender to lend the money based on the value of the deal. I want to be clear that I am not trying to ask for a loan through this post, only suggestions on where to start.
I did find similar threads and discussions on the forum but I wanted to start my own that was very specific and hopefully the answers I receive will be relevant to what current funding options are available as well as find specific methods and lenders that you all have experience with.
Thanks,
Quinn
@Quinton Wadkins I would get to know some private lenders in your area. If you truly have a good deal, you'll find people with money to lend. You could start with your local real estate investment association if you have one. There are also local meetups you might be able to find in your area. With the price of the property being fairly low, I'm sure you can find someone to fund the deal. You would potentially pay a few points on the money and/or around 10-12% interest, but it would be short term until you can get the homes rehabbed and rented. One hiccup you might find with refinancing the property is finding a traditional lender that will finance less than 50k. That's hard to do, so you'll have the easiest time if the property has an ARV of around 75K. Then, you can refinance 70% of the new value and meet the 50k requirement. There are other options, but this is easiest
Thanks for the response! I do believe the ARV will be around $80-85k, I live about a mile from one of the houses and I just bought mine this year so I am pretty familiar with the neighborhood and the home values (I think). I will definitely check with the local REIA. Again I really appreciate the feedback.
