First flip and question about financing

13 Replies

So I have my first off market deal. Not 100% sure how to setup the financing side. They want $120k cash. I have little over half that and would need to come up with the other. Do I finance or find a hard money lender? If so, where do you find them? I am in the upstate area of Greenville, SC. I have to make sure that whoever I deal with is 100% legit and trustworthy, licenses, bonded, etc. Just looking for some advice for my first one. 

Hi There!  If the renovation will take 6 months of less, I’d suggest you go with a hard money lender. If you go with a hard money lender, expect to pay an interest rate between 9 and 12 percent along with 1 to 3 points. Check with your local real estate group or the bigger pockets hard money lending directory to find a good hard money lender. Try to find a lender in your area, as they will have more flexible terms as opposed to a national lender. 

Hi @Rhett Claypool ,

where do you find them?

@Paul K. had some good suggestions above; you can use the 'Network' tab on BP, and also speak with some other investors at your local REIA.

I have to make sure that whoever I deal with is 100% legit and trustworthy, licenses, bonded, etc. Just looking for some advice for my first one.

Licensing requirements vary by state, and there are far less ones for lenders that work exclusively with investors (many state don't require any licensing). As a result, you can look out for some red flags like...

1. Exorbitant up-front fees

2. Lack of reviews

Hope this helps,


I was actually in a similar position as you are now. I used the network tab here on BiggerPockets and reached out to a bunch of hard money lenders. Ended up going with HouseMax Funding and it was a smooth process. Went from signing a contract to closing in exactly 2 weeks. But yes, as said earlier interest rates typically begin around 9% with points depending on your level of experience. Also was able to do a construction drawback as part of the loan. I pretty much just needed to come up with 20% of the purchase price. Good luck!!

It's been 8 days since your post... I'm so curious to hear what happened with your deal!   I would assume that they wanted to close really quickly?    Money is really cheap and really easy to get as long as the lender thinks it's a good hopefully you had lenders lined up to give you money!  Best of luck!

Getting money lined up BEFORE you find the deal is always the better way to go. There are deals out there but if you do not have the finances to close, then it is a deal lost. I know there are those that say find the deals and the money is easy but especially for those without experience to fall back on and get a better rate, hitting a lender (HML or bank) cold almost always ends poorly in terms of closing the deal. Put together a notebook, spreadsheet or some other tool to start getting financing sources lined up so you are ready to call one and get the ball rolling when the deal arises. I have found that all lenders are not alike and depending on the type of loan, the type of property or what your intention is one will be a better choice than the other. We lost out on a great multi-family deal early on when we did not have the financing piece in place when we met with the seller. Made a lot of calls and had one lined up but it took 3 days and guess what, another investor that had his money lined up got a sweet deal and we missed out. Hope this helps.