Should I scale using hard money?

[Christian Walker]

Hello everyone!

Okay, I have a question I’m open to hear opinions. So this is my 2nd official year owning my investment business. The first year I did mostly flips. I have my tax returns from that year where I hardly wrote off anything to show that I made a good amount of money. I want to start getting a good relationship with the banks but they wont batt an eye at me or my deals because i just have one years worth of returns. I’m wondering if I should start scaling my portfolio by using hard money to buy rentals and just write everything off and grow my rental portfolio that way, or should I spend this year just flipping and take a hit on my taxes to show that I made a consistent income? 

[Issac San Miguel]

Quote from @Christian Walker:

Quote from @Issac San Miguel:

Quote from @Christian Walker:

Hello everyone!

Okay, I have a question I’m open to hear opinions. So this is my 2nd official year owning my investment business. The first year I did mostly flips. I have my tax returns from that year where I hardly wrote off anything to show that I made a good amount of money. I want to start getting a good relationship with the banks but they wont batt an eye at me or my deals because i just have one years worth of returns. I’m wondering if I should start scaling my portfolio by using hard money to buy rentals and just write everything off and grow my rental portfolio that way, or should I spend this year just flipping and take a hit on my taxes to show that I made a consistent income? 

the question is, what do YOU want to do. do you want to wait? do you want to scale now? is there a deal (or many) you will miss out on due to the limitations on conventional lending?

How much more useful is a bank than a good 3rd party lender? I know rates are lower but overall is paying more in taxes worth getting a few points off? I know it all really depends on what I’m doing and my plan, but just want to hear others personal opinions.

banks offer lower rates and more scrutiny in underwriting, it kills velocity. 

as a hml, i hear all the time about the deal that was lost because a bank could not perform.