Distressed Properties in Cleveland

3 Replies

We have chosen to start flipping houses in Ohio using hard money as leverage to acquire properties a lot faster than traditional lending. However, we aren't familiar with the qualifications and how to choose the right lender. Therefore, we need help and resources from anyone familiar with the process. Thank you in advance!

Originally posted by @Stephanie Ortiz :

We have chosen to start flipping houses in Ohio using hard money as leverage to acquire properties a lot faster than traditional lending. However, we aren't familiar with the qualifications and how to choose the right lender. Therefore, we need help and resources from anyone familiar with the process. Thank you in advance!

 I would make sure you are familiar with the costs of hard money before you get started. Hard money can be a trap for novice investors. I have seen people get burned here in Ohio.

As Remington said true hard money can get very expensive. Double digit interest and 3 or more points. Not to mention very short loan periods. You might have to buy, rehab, and resell or rent and rfi in 4-6 months. If you are still holding the note at that point it could be another point or 2. Very ambitious, especially for a newbie, There is a middle ground between conventional loans and hard money, private lenders. They usually run around 8.5%. Places like Lima One, Lending One, Lending Homes. There are others. Just google fix and flip loans or private lenders. The will usually do about 70% of the purchase and 85%-100% of the rehab. Some places like RehabFinancial will do up to 100% of both as long as the total is less than 70% of ARV, you have a decent credit score and verifiable income. In this climate it will be hard to find anyone who can turn things around in a few days if that's the goal. But hard money should be a last resort.

Good luck

I've personally used LimaOne on a 13 month term. Just make sure you know the terms of the loans and have a sale/refi possibility.