First Flip lending concerns

[Jessica Cook]

Hello BP,

New investors , how are you locating easy hard money lender or Pml ? w/o strict credit requirements

[Jonathan Greene]

There are a lot of options out there, but the rates are excruciating right now for new flippers. It's not a great time to do a first flip with high labor costs, high materials costs, high property costs, and high rates. The property should have more impact than credit for hard money, but if you have never used the company, you are probably looking at 14 pct and 2-3 points now.

[Jessica Cook]

okay , thank you for your advice .I currently have the property under contract so as of right now  I should try my best to make it as good of a time as ever .

[Noah Wright]

Quote from @Jessica Cook:

okay , thank you for your advice .I currently have the property under contract so as of right now  I should try my best to make it as good of a time as ever .

 We can go low depending on your unique credit profile. I just did a 10.5% + 2pts for a first time flipper with only 10% down. Keep looking, and let me know if I can help :)

[Jessica Cook]

Thank you Noah! 

[Stuart Udis]

I am not a proponent of flips for first investments. Start with a rental that has modest rehab requirements such as updating kitchens and bathrooms and make sure you qualify for permanent financing through a lending source that offers interest rates similar to that of  a bank. One of the biggest risks I observe with flips and first time investors are instances where the project goes over budget or gets stuck in mud, can't sell and even worse the borrower doesn't have the credit profile to refinance out to a lower interest lending source if borrower is required to hold the property as a rental. 

[Robin Simon]

Are you investing in New York?  One tip is that is a very tough state for flipping/investing too because of tough laws against lenders if needing to foreclose, just something to watch out for

[Jessica Cook]

no , in pa . Ny is def not a starting point for me .

[Jessica Cook]

Thank you for your reply Stuart ,actually that's exactly what I am looking to do in PA. Still need the funding to do moderate rehab .

[Mark Cruse]

In the future, please have all this lined up before you submit a contract. The wrong lender can sink you, and trying to scramble to find one may skew things. Try to reach out to your network and go to a local REI where you could get some referrals.

Do you have your contractors set up? 

Have you assessed how some of the repairs will be funded? 

Do you know the cost of repairs and the ARV?