Hard money loan or private lending individual 

I prefer to use cash that I have worked for and saved. That takes a lot of risk away. You really want to be careful borrowing money in the environment we are in with rising interest rates.

 thank you for that

 that is true. Have you ever bought a foreclosure?

Hard money. 

If you own property and there is equity you maybe able to borrow against it. You will get better rates and terms. 

It depends on what you value most.

Borrowers who want the lowest cost of capital typically pursue local banking relationships.

Borrowers who want more speed and a less stringent process typically pursue hard money lenders or individual private money lenders.

I don't know that it matters. What's the best deal for you which may not always be the least expensive. People have their own preferences and that's okay. I have private money, hard money, and unsecured loans that can be used to fix/flip. When it comes to BRRRR my private money is for no longer than two years so if you plan to rent out you would need to refinance. The private money fills the gap between purchase, rehab and refinancing. My unsecured loan is for 5 to 7 years which gives more time but can be paid off early.

Bridge loan with rehab. You'll get 80% - 90% of the purchase plus 100% of the rehab. Capped at 70% - 75% ARV.

 In regards to the Hard Money/Private Lending universe, you are looking at an interest only loan at about 10 to 12%. Down payment and rate are based upon your current real estate portfolio. If rehabilitation is needed, then reserves may be required as well. 

 and by banking relationships do you mean home loans from the bank?

 do you know what the credit score requirements are... and thanks for the response

Not necessarily. My private lenders interest is between 8% - 15% depending on the borrower's personal credit rating. The worse the personal credit rating, the higher the risk and, therefore, the higher the interest. We also don't consider the entire real estate portfolio other than to determine the experience the investor has. Based on experience, we will fund 100% purchase, 100% rehab, and 100% closing, not to exceed 70% LTV. For a newer REI we will fund 90% purchase, 90% rehab, and 0% closing, not to exceed 65% LTV so there is a larger cost to the investor. These are interest only loans up to 24 months which are good for fix/flip but we can refinance to a long term for those that want to BRRRR.

 

So for bridge loans the credit isn’t as big a problem.  I’d say as long as you’re a 660 - 680 you’re safe.  These bridge loans usually only have 6 - 8 payments.

When dealing with a DSCR loan that has 360 payments, the credit is a bigger deal.

 Thank you.. i appreciate this knowledge

Depends on what you need. Hard money lenders or private lenders are a good option, they're fast and flexible when it comes to loan approval. However, they do have higher rates.