Better for flipping, Hard Money Lenders or Homepath Mortgages??

[Adolfo D.]

Hello BG community! I am new to the REI world and after extensive research and some training would like to begin with flipping homes. I've been considering hard money lenders, but am aware they don't cover the entire purchase price of a home. Thus causing me to cover the gap with my own funds. Also I'd have to cover repair costs, expenses at the backend, etc.

From my understanding of a HomePath mortgage, these are bank repoed properties by Fannie Mae. So chances are off the bat they're cheaper to buy as they were foreclosed homes. Also what's enticing is that I can have the option to finance repairs into the loan itself. Can someone please give me some high-level pros and cons of both? As of now I would think HomePath would suit better? Thanks in advanced!

[Nghi Le]

@Adolfo D.

Actually, hard money lenders can finance the rehab as well.  The good ones I've seen out there finance as much as 90-95% of the total cost of the project (purchase + rehab) at pretty good rates.

I'm guessing a HomePath mortgage is a conventional loan.  The biggest advantage is that they're the cheapest loans you can get, but the huge disadvantage is that they take a long time to close.  In my market, most flips need to close in 1-2 weeks, so most flippers just use hard money.

There's not really such thing as foreclosure prices anymore.  That was back half a decade ago.  Most things you see on the market now are retail prices everywhere.