Advice on New to Hard Money

[Joshua Bahr]

My wife and I closed on our first rental in October 2020.  We have a renter and is cash flowing $185/mn.  We enjoyed the search, purchase, rehab, and renting process.  Previously we've done two successful but major live-in flips where we touched nearly every inch of the house.  

Looking at the acquisition of our next property either as a BRRR or flip. We are both educators and have a family of six so personal finances are tight and an obstacle. We do have $25k in savings and $30k could be pulled from our primary home on a HELOC.

With that being said, I'd like to be creative rather than always dig into our personal finances.  I've researched and interviewed 8 hard money lenders.   I have a lender I like, understand, and  gearing up to take off on distressed properties, looking to be all in $100k-$150k on a deal summer 2021.  

1.  Biggest items to be aware of when new to hard money.

2.  Correct me...if we get comfortable with using hard money, I see this as an accelerant to our situations.

3.  Any other thoughts...?

Thanks BP!!

[Aaron Whatley]

The biggest item to be aware of with hard money is the interest rate, which is going to be in the double digits.  There are also going to be points and other fees that the buyer will be responsible for at closing.  Having cash reserves and a clear strategy, its definitely a tool that can be used to accelerate your deal making.