Use cash for first deal or borrow?

[Jim Murphy]

Hi All!! I do have cash to make my first purchase and rehab it , my plan on the first few deals will be to flip the properties, some people at my investor club have advised that I use borrowed money for the first house or two what do you guy's think.

[Bill Gulley]

Hi, you're in a unique position as a beginner. Investors will always leverage their deals as Scott pointed out, that's the best way to acquire properties.

But I see a different situation in your case. How many rehabs have you done? Experience has a price too, and doing your first deal under the constraints and maybe a time line of a lender will just add to the pressure of your deal, as well as expnese as Jeff pointed out. If you use your funds you can move quickly on the deal without those concerns. Concentrate on getting your rehab done and done right.
After you get this deal done, you'll learn and gain some experience, so when you walk into a lender's office you can say "I need a loan and I have done" this instead of saying, "I'd like to use your money and try this!"
I don't know what kind of financing you were planning on using, but if you use your money and you needed to short term financing, your bank would rather provide some final expenses than be on the hook for 75 or 80% of your project. The only reason I advise this at this time is due to it being your first deal, if you have problems it won't lead to financing problems. Otherwise, as you become familiar with doing these deals, begin to leverage them and build relationships with lenders. IMO, Bill