Hello to all,
I'm new here so I apologize if this subject matter has been discussed. My question is more based on strategy, I am looking to buy my first flip property. I planned on doing the minor cosmetic fixes i know i can handle (sheet rock, paint, trim etc.) but my main focus is going to be managing the flip as a whole (contractors,scheduling) creating a system, and setting up the next deal. So my question is with my money being tied up in this first flip, how can I set up the next deal finacially to keep the ball rolling? Sorry for the long winded question, but any info you guys/girls have is much appreciated.
Partner or borrow or just wait. Maybe you can wholesale the next deal to acquire some faster cash without having to use a lot of your own.
Hi Vincent -
If you're eager to get started with multiple projects right off the bat, it would be wise to look into borrowing in order to minimize your capital contributions. There are several lenders that would be able to finance both the purchase of the property as well as the renovation costs with interest only payments and 12 month terms. That would be a wise route, and would allow you to grow your bottom line quickly through the power of leverage.
Scenario I find two properties that show promise find an instituation willing to let me borrow for both properties, so the only skin I have in the game would be the percenatage down for both investments and use the banks money for everything else? Should I consider hard money ?
Yes, look into using hard money. May be higher rates but could be more flexible on underwriting.
You should be able to use hard money with 70% ARV loans give or take a few %. Just make sure your deal still pencils factoring your money cost. Your rate will be determined generally by your experience, so being new it may be closer to 10+%. When you use expensive money like that, time is your enemy and you need to be extremely confident in your ability to deliver on time, within your holding period estimates.
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