Hard Money or Portfolio Lending?

Question

Flippers, what funding do you recommend for an investor's first flip? Particularly portfolio lending versus hard money? I need some folks who have done this to compare and contrast the two for me.

Peter Mckernan · Answer

If you can use private money that is the best way to go! The best way to get the best rates and terms on it all! Hard money is usually higher rates, and portfolio lending is usually for holding more properties like rentals and going back to the same lender over an over.

I would go, private money, hard money and then portfolio if I am picking what lenders and who to work with on the deal.

Fred Shatzoff · Answer

You usually hard money  portfolio lending is if you have properties with equity typically 2 to 4 properties in one state and you use the equity to get a larger loan amount.  Do you own investment properties?

Scott Chilton · Answer

For a first flip, the most important thing is not the cheapest money. It is finishing the deal without stress. Portfolio loans and hard money both work, but they solve different problems.

Hard money is usually the easier path when you are starting out. These lenders care more about the deal than your personal history. They move fast, fund repairs, and are used to flips. You pay more for it, but that extra cost often buys speed and fewer surprises. That can save a new investor from missing a good deal or getting stuck halfway through a project.

Portfolio loans are usually cheaper, but they come with more rules. They look closely at income, credit, and timelines. For a first flip, that can slow things down and add pressure, especially if the rehab runs longer than planned.

If this is truly your first flip, hard money is often the better teacher. It lets you focus on buying right, managing the rehab, and selling well. Once you have a track record, portfolio lending can make more sense and help you keep more profit.

Frank Pyle · Answer

For a first flip, hard money is usually the path of least resistance because they care more about the deal and the ARV than your track record, but it can get expensive fast if your timeline slips. Portfolio lending can be cheaper and steadier, but a lot of lenders want some experience, tighter DSCR or liquidity, and they move slower which can cost you the deal. The real decision comes down to your margin and your plan for the exit, because points and interest only work if you have enough spread and a realistic rehab schedule.

What price, rehab budget, ARV, and how long do you think the project will take from close to resale or refi? And are you planning to sell right away or hold it as a rental after the flip?

Cam Schwartz · Answer

Hi @Leonard La Rocca III.My understanding is that portfolio lending is for multiple properties at once. If this aligns with your understanding then hard money is definitely the best route.

Hard Money or Portfolio Lending?

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