Rehabbing & House Flipping

8 Replies

Currently, I am looking searching a loan to search for my first property to fix and flip. I have a few questions for you advanced flippers, investors and real estate entrepreneur's.

1) How did you source for funds for your first flip? Loans?

2) How likely is it to get ahold of an investor for my first flip?

Currently, I am pre-approved with an conventional loan and a FHA 203K Rehab loan but came to halts due to the fact that it has to be my primary residence and thats not what I'm interested in doing. However, those are the only loans that I come across. I have excellent credit, any advice????

Hard Money Loans - Most expensive in most cases

Private Lenders - Less expensive, requires some qualifications

HELOC - Depends on amount of equity in your home

Cash out Refi - Depends on amount of equity in your home

Self Directed IRA - Requires setting up LLC and all profits go to IRA

Hi @Felix Ricarte

As you know, most every type of loan will require some sort of money down towards the purchase of the investment home, typically 20-30% of the purchase price. Hard Money is the most expensive but the easiest for this type of loan. All HML should be asset based and will be able to close within a 3-5 days. This will prove very useful, just make sure to account for the cost of the money.

Private lenders will be a better deal for you, but they are harder to find and their capital is often limited. So if you are finding a few deals a month, I doubt most would be able to keep up with the financing. 

Just a few tips. Hope that helps.

Good luck!


Do what I did and max out all your available lines of credit at 0% for a year.

Getting an investor for your first flip. Do you know someone with deep pockets? Ask, Ask, Ask!

While conventional bank financing is likely the lowest cost loans for a RE transaction, it also comes with the longest time to approve, the most paperwork, the most documentation, and weakens your offer due to the fact that it is subject to you obtaining financing. All cash offers will often win out over financed ones.

Keeping that in mind, you must think outside the normal lending box. Private money is a viable source, your chances of finding that are entirely up to you and how many people you know and ask. I started with family, then friends, then business contacts, and all that progressed into what i have built today. As with anything, building a strong foundation will keep your building standing, i.e. performing on each of your promises to pay the lenders will enable you to scale private money.

Hard money is also a resource, it does cost more but certainly viable so long as you have capital to contribute. 100% loans for first time borrowers will prove to be difficult (almost impossible).

@Ben Stoodley @Rodney Marcantel @Will Barnard Thank you for the advice and taking the time out of your day to respond to this forum. I have a few follow up questions:

1) How do people locate private lenders?

2) I don't have much to start off with such as down payment, maybe 3% of a purchase price I'm looking into. Will this be possible?

3) Would investors be a better source? Going 50/50 with them providing funds and me putting in labor? If so, how do I locate investors?

4) A realtor has a "hard money lender" who is interested in working with me. However, the realtor doesn't want to give me the "hard money lenders" info until I find a property and until I put  $3k for a wholesale property(to hold the property until I obtain financing). I asked for an app to see the rates id be getting but he continues to ignore anything regarding the app and "hard money lenders" info. I feel like he's trying to screw me. Any advice or experience with something/someone like this? 

Thank you for all your time and advice! I sincerely appreciate it!


1. Private lenders are people you have some type of current relationship with, family, friends, neighbor, doctor, dentist, accountant, etc. From there, you should tell EVERYBODY you can what you do and what you offer. The more people you talk with, the more chances of creating a private lender. You can not publicly advertise for lenders, that would violate SEC regs.

2. 3% is a very small amount which make it more difficult, but not impossible. You will likely have to find a very good deal with plenty of margin to make it work. You can accomplish this with private money, not with hard money.

3. Possibly, the key is that you need to bring enough to the table to warrant 50% of the profits. If they are coming with the experience and the cash, they may be looking for much more than 50% of the deal, I know I would be.

4. Get rid of this agent now, in fact, get rid of him yesterday! Hard money lenders are a dime a dozen these days, any Google search or search on BP will likely result in several hard money lenders in your area. You can also get referrals of these lenders from other investors ate RE meetings in your area. There is no legitimate reason why a RE agent should not give you the hard money source, NONE! That right there tells me this agent only cares about his own self interests and the very reason you should NEVER work with him!

@Ben Stoodley A simple Google search for "private money lenders" will work to locate a lender like this? I've been searching but a few companies tell me that I need at least 20-30% down and I don't have no where near that. 

Hi @Felix Ricarte ,

Yes, that is definitely a good start. I would highly recommend finding the true private individual investors at local REI groups. I found mine on and you can Google "Real Estate Investing Network Group" or something as well. 

Yes, you will need 20-30% down in MOST cases. Maybe if you find a great individual private lender/investor, they will provide more. If not, you need to find a private lender/investor that will help you with a down payment... he'd most likely ask for more points/higher interest/equity split or something because he has to go into second position.

Keep in mind, most good Hard Money Lenders will allow any form of financing for your down payment, it doesn't have to be personal capital. Try negotiating with each Seller, see if they will do a carry-back for Seller Financing. Or if you/your team has other investment properties, you may be able to cross collateralize. Just have to get creative :-)

Good luck!


Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here