Wholesale and hard money

[Maddy Lakshmanan]

i’m considering this strategy to increase my real estate portfolio

1. - Looking to buy properties from wholesale sellers 

2: - Use hard money to buy SFR/townhome and I'm looking to put 15%. The hard money lender is offering 10.99% with 1 origination point

3. - refinance in 6 months

4. Rent for positive cash flow

I’ve never done this strategy before . I would appreciate what are some of the hidden challenges and land mines I should be aware in this strategy 

Thanks in advance 

[Doug Smith]

@Maddy Lakshmanan Right now in the US, there are pretty much two types of lower-doc investor loans, Bridge (short-term, higher interest) and Investor Cash Flow (aka DSCR, longer-term, medium-level interest. Depending upon the amount down, your experience, your credit score, the property, prepayment penalty, etc, you're probably in the high 7%s to the mid-8%s. There are a lot of factors that go into the rate. "Hard Money" is really for a short-term bridge.