Newbie starting out any advise

[Tamarah Berry]

Hi all,
I have recently just become interested in real estate investing. I have found my first rental property. Now, I am not sure what to do from this point. I was looking at getting a hard money loan instead of a bank loan. Due to COVID, I will not have a regular income until Spring 2020. My question is now that I have found the property. Do I need to get approved for a hard money loan first or do I actual purchase the property from the bank first and then go to the hard money lender telling them how much I need? If I am not able to purchase the property from the bank ( If someone purchases that property before me), what happens with the money that was given to me by the hard money lender? Do I just return the check? Any advise would be greatly appreciated. Thanks in advance!!

[Jay Styles]

Hi Tamarah, I'm a newbie also but I suggest you read this book by Austin Miller Free Houses. He walks you through the entire process of acquiring a hard money loan and using the 80/20 rule when buying  property. To answer the last part of your question, you would acquire the hard money loan first to buy the property but be sure to add in all of the repair expenses. You'll then use that money to buy and repair the property THEN go to the bank to refinance the house. You use that money to pay back the hard money loan plus whatever interest you agreed upon. By using the 80/20 rule you should have a good amount of equity in the property. You can then use the property as a rental property with positive cash flow while paying back the bank.