Use my own money or use a hard money lender?

[Evan Bell]

Wondering whether I should use money from an inheritance I'm getting to do a fix and flip, or find a hard money lender instead. This will be my first deal on my own, as the last one I did was a partnership with my dad where he supplied all the money needed. My thinking for using a hard money lender is that I could utilize other people's money and keep the majority of my inheritance on hand as a reserve. I'm planning to start out with entry level fix and flips, 2bd/1ba-3bd/2ba in established neighborhoods. Any input is appreciated as I have never gone the hard money route before, but it seems like it might be a good idea, especially if I were able to do the deal and keep the inheritance as a kind of safety net. Thoughts?

[Walter Key]

@Evan Bell In that case, I would recommend a HML. Establish the relationship early and make sure you know the terms (points, interest, what LTV they lend to, early repayment penalties, etc). My previous post stills stands, run your numbers, check them twice, include a fudge factor.

There are some HML out there that will lend 90% LTV on the ARV and 100% of the rehab cost. This should leave you with some reserve cushion after getting the deal funded.

Best of luck to you!