Hard Money Loans and Closing Costs

[Wardell Picquet]

This is a serious newbie question, but I'll go ahead and ask anyway. I want to start flipping houses here in San Antonio and I'm seriously considering hard money. I've read about the Closing Costs associated with the hard money loan ( fees, points, interest, etc.). What I really want to know is: will hard money lenders consider the Closing Costs associated with the Purchasing of the initial distressed property to be part of the purchase price or does the borrower have to take care of that as part of having "skin in the game?" 

[Seth Teel]

@Wardell Picquet

 Most HM Lenders require you to "have skin in the game" and bring some cash to the closing table.  By most, I mean 99.9%.  There is a new HM Lender in San Antonio that is rolls your points and fees into the loan and you pay them on the back-end when you resell. The company is Texas Quest Capitol. They are new to SA, but have been lending in Houston for many years.  I have never done a loan with this company, but do know the guy running it here in San Antonio.  If you'd like his contact info, send me a DM.

The other alternative is finding a private lender.  I have been using private funds for my flips and bring no money to the closing table and pay my points, fees, and (depending on terms) my monthly payments when I resell the property. It took me a couple of years to find some good private funds, but once I found some the flood gates opened. My best suggestion is to document everything you do: wholesales, flips, rentals, sub2s, etc, this will make it easier to woo a private lender when the time comes.

Good luck!