Real Estate Agent · Houston, TX · Member since 2020 · 54 posts · 11 votes
Hi BP,
I am looking to start flipping houses but currently don’t qualify for a conventional loan.
My concern is I’ll be using hard money and if I get “stuck” in a flip I won’t be able to refi with a conventional mortgage to rent out . Does anybody have other ideas, workarounds, or strategies to address this possible issue?
Investor · Greenville, SC · Member since 2013 · 85 posts · 17 votes
5y
Find a partner! If you can source good deals you will not struggle to find people with money that want to do them with you. Find someone with $$$ to burn and you source and operate the deal. Two parties bringing very different things to table = great partnership.
Just a suggestion, if you plan on doing flips..you should probably get an LLC. Then any flips you do can be under an LLC. Conventional loans, require you to put typically 20% down. Some HML lend a certain percentage plus give you the rehab amount for a percentage—just a suggestion.
Developer · Honolulu, HI · Member since 2018 · 111 posts · 93 votes
5y
You can evaluate the flip as a rental so if the market tanks and you can't sell then you can switch to a BRRRR type model. There are plenty of commercial rental loan products that don't require W2 income (patch of land, lending one etc.)
Investor · Greenville, SC · Member since 2013 · 85 posts · 17 votes
5y
Find a partner! If you can source good deals you will not struggle to find people with money that want to do them with you. Find someone with $$$ to burn and you source and operate the deal. Two parties bringing very different things to table = great partnership.
If your confident in your numbers maybe there is someone you can approach about a private loan. I once approached a well off friend with an offer and he loaned me the money. For my first flip I was very confident in my numbers and offered a family number 10k for a 12 month loan. I only needed 5months but 12 was a nice time cushion.