I am interested in rehabbing properties as a way to save money to buy and hold properties. I am very green, however I have General Contractors in my family who are willing to help on the project, What would be the process to acquire a hard money loan so that I can get my first project going? I am a Real Estate Agent and I see a number of properties on the MLS that would be great starter properties. Any experiences and/ or advice in relation to hard money loans and getting started in real estate investing would be appreciated, Thanks!!
@Quinten Jones Hard Money is pretty easy to come by. There are many online and guaranteed there are many at your local REIA. They base it almost fully on the property itself so you just need to make sure you buy right and have everything lined up so you can get the job done and refi out after. Good luck!
Thanks @Kyle Karges !! The information is definitely useful, I am attending a REI meeting on Wednesday in Sacramento and I will certainly network with potential private hard money lenders. It would be nice to find a partner to JV with and contributing to the investment with a hard money loan. Again, thanks for the info.
Even with a HML you should plan on having some of your own cash. If you find a 70% deal (that is, purchase plus rehab is 70% of your eventual selling price - ARV) and you can find a lender to give you that full amount, you should plan on having at least 15% of ARV of your own cash to cover your up front costs, points, monthly payments, etc. And many HMLs require you to pay for labor and materials and then be reimbursed out of the rehab money which is typically held in escrow.
Jon Holdman, Flying Phoenix LLC
@Jon Holdman , Thank you for the comment. Definitely keeping this advice in my notebook!!!
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