Just starting out close to Panama City, Florida

[Bj Meadows]

Found this site today on a podcast and thought I would give it a try! Been a Special Education teacher for 25 years- trying to retire and have studied real estate investing... realize I cannot do my own flips after buying my forever home after the hurricane... but that is a different story! I am now looking at multiple properties that I am interested in for LTR or STR opportunities. One is a JUMBO that needs a TON of work- and trying to finalize that deal now- I hope. But in the meantime, I thought- why stop at one property? Why not purchase several because each property can pay for itself and I am seeing all of these lenders flooding my Facebook now that I have googled some loan options- and so many offer 100% financing... what am I missing here? If there are 100% loans... why isn't everyone doing this? Are they ALL scams? Can you legitimately purchase multiple properties with this kind of funding during a short period of time? What is the drawback? Also looking to find private lenders who deals in my area- maybe to get a better deal on this JUMBO I am working on. Looking at around 500K for purchase and rehab but the income potential is amazing! Any leads, advice, etc.- highly appreciated!

[Tanner Lewis]

Quote from @Bj Meadows:

Found this site today on a podcast and thought I would give it a try! Been a Special Education teacher for 25 years- trying to retire and have studied real estate investing... realize I cannot do my own flips after buying my forever home after the hurricane... but that is a different story! I am now looking at multiple properties that I am interested in for LTR or STR opportunities. One is a JUMBO that needs a TON of work- and trying to finalize that deal now- I hope. But in the meantime, I thought- why stop at one property? Why not purchase several because each property can pay for itself and I am seeing all of these lenders flooding my Facebook now that I have googled some loan options- and so many offer 100% financing... what am I missing here? If there are 100% loans... why isn't everyone doing this? Are they ALL scams? Can you legitimately purchase multiple properties with this kind of funding during a short period of time? What is the drawback? Also looking to find private lenders who deals in my area- maybe to get a better deal on this JUMBO I am working on. Looking at around 500K for purchase and rehab but the income potential is amazing! Any leads, advice, etc.- highly appreciated!

Some hard money lenders will "offer" 100% financing, but a lot of them are doing a bait and hook strategy and will still be limited to LTV regardless. For hard money lending there are two percentages that limit loan amount: LTC and LTV. LTC is a loan to cost, or your loan to your purchase price + reno. LTV is a loan to value or loan to the after-repair value. In most of these cases, you will be drawn in by 100% financing and be limited to an LTV ratio anyway; you're just stuck with a higher interest rate. Some of these lenders will not acknowledge the LTV limit until you already have the appraisal, and then they cut leverage. Be cautious with these lenders. 

In my opinion, very high leverage is not worth it to investors with high liquidity. These are mainly meant for first-time investors with low reserves, and you end up making a much lower profit margin due to the extremely high interest payments.