Hard Money Loan For First Flip?

Question

Hello All,

I’m new to real estate investing and would really love to start House Flipping to start off. I’ve worked under a contractor for a couple of years, from building the home , plumbing and hvac , to all the finish touches. I’ve partnered with a license contractor to get the ball rolling and get more rehabs done. I’m considering getting a hard money loan as funding for our future projects. Would this be a good way to go? Anything I should keep a look out when looking at terms with these lenders?

Thank You

Erik Estrada · Answer

Hey @Michael De Oliveira

Here are a few things I would keep in mind when interviewing potential lenders:

• Do they have any reviews? Social Media Presence? Nowadays this is a must
• What is their rehab draw process like? Do they have an app? Do they only do it via email? Tech is also important
• Do they have any incentives on the refi? If you do the purchase, can they discount the refi?

Do they have any reviews? Social Media Presence? Nowadays this is a must

What is their rehab draw process like? Do they have an app? Do they only do it via email? Tech is also important

Do they have any incentives on the refi? If you do the purchase, can they discount the refi?

Michael De Oliveira · Answer

Of course! Let’s connect and discuss this further.

Julie Chai · Answer

Hi Michael, since you're already in the contruction industry, you should be able to get a good idea the rehab cost and time frame to finish the project. I have a partner that can possibly help lend at 0% interest for the first 6 - 24months. Let me know if you want more info. It doesn't hurt to discuss your options!

Michael De Oliveira · Answer

I appreciate the answer. I sent you a private message!

Ryan Davies · Answer

@Michael De Oliveira hard money is a fantastic way to leverage and do more deals. It’s also a way to get into flipping without needing a bunch of your own capital. Most charge 12% and 2-4 points under front and it’s a 6-12 month term. Happy to answer any additional questions.

Bill J Fay · Answer

Sounds like you have great experience when it comes to construction. This will be huge when it comes to your 1st flip. In regard to Hard Money Lenders, here are some advantages:

1) Most lend to 1st time investors

2) high leverage, less downpayment

3) the ability to close quick with no appraisals

Besides rates and term, I would ask your potential lender how their renovation draws work, which areas they do not lend in (most national lenders have some area restrictions), and how much reserves they require.

Bob S. · Answer

Yes,

Hard Money Loan For First Flip?

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