Ready to start investing, Should I use a hard money lender?

[William Carr]

Currently have no real cash on hand but am confident and ready to look into a flip or a rental property. Do a lot of beginners use hard money lenders when starting? Thank you

[Aaron Beauchamp]

@William Carr Hard Money is a great tool! However its expensive and you will need cash reserves. I like to see 15% to 20% reserves that are usable at a moments notice. this is because most hard money lenders work with a draw. This means that if you need to replace a roof and that costs you $10,000 you will typically need to pay that out of pocket, then we would send out an inspector out and reimburse you. Also unless you get a great deal with a solid ARV you will probably be bringing cash to close. Money is needed! Hope this helps!