How many hard money loans can I take out at once?

[Steven Barr]

Hi BP!

I have only used hard money 1 time, and don’t remember the specifics of what their requirements were of my personal finances, if any.

I’m curious, how many hard money loans could I take out at a time? For instance… could I fund 10 flips at once if I had the deals lined up?

Thanks!

[David Friedman]

I can tell you from experience that you can only taking flipping so far before it becomes extremely difficult to scale. I've flipped 100 homes a year before in California. Juggling that much hard money and homes becomes inefficient and you are better off taking your profits from flipping and moving into multifamily, commercial or large single-family home developments. Imagine having 100 houses spread out all over an area. Imagine the construction team and project management team you would need to manage that. If it takes you 8 months on a house instead of your planned 4 months, the interest on the hard money took all of the profit from that project. All I'm saying is flipping can easily cascade and you are better off creating a strategy that takes advantage of economies of scale.