Best way for someone with little experience to finance a flip?

[Wendy Owens]

Up until now we have always lived in a home for two years as we renovated it and then sold it. We have done three this way but are now in a home we really prefer to stay in. We were looking for our first rental, which our broker said she was more than happy to help us finance when we stumbled across an affordable and quick flip. The purchase price is $110k and the reno budget with a buffer is 25k. The total time investment would be 6 weeks before we can list it at a list price of $170k based on comps. We estimated a 20k profit after all costs. Not huge gains but seemed like an easy no brainer. We called our broker who said if we sold it in less than 6 months they were not interested in financing despite us putting 20% down and paying cash for all the renovations. This got us looking into hard money loans but how do you know who is reputable and what are good terms and what we should run from.

A little about us, my husband and I have run a tech company for 10 years now that develops software. We have 3 additional employees and are still growing a little every year. We can show a steady income and a long history of it so self-employment doesn't seem to be a huge issue for us when qualifying. We have cash to put into the deal. We have excellent credit. What we don't have is experience in short term flips and we haven't gotten a rental yet so no experience there.

Is hard money the best way to go with flips? The margins aren't huge on this house so wondering if it's best to just let this one go. Our broker suggested we buy and hold the property for a year but if we were to buy a property with the purpose of renting we could acquire them in a different neighborhood for 75-100k that needs less renovation but earn similar rent values. Any input or advice would be appreciated.