Hardmoney question for BRRRR

[Paul Chae]

Hello Fellow Biggerpockets users. I have a question regarding hardmoney loan for BRRRR.

Let me describe my situation

- looking to get around 100k from hard money lender to start BRRRR. Not much saving at the moment.

- working with Fund and Grow, an entity that helps with getting fund, but was not successful to get business credit right away as advertised, heard that I need to use personal credits only for the next 6months to build relationship with the banks, which I feel is too long for me to start.

- After the banks went through my credit history, my credit score went down to 695-715 ish from 735ish.

- I am a nurse in nyc, work 3days/wk 12hour shift

- currently on 1 month vacation, moving on to a next job in mid January , annual income is 90000-105000

- target properties are going to be distressed, $40000-$70000 range in any adjacent areas of NYC.

I looked up what hard money is, how they work, etc. But I am still wondering if "my" situation suits for this type of loan? I'd love to jump in if there's reasonable amount of risks that I can recover if anything goes wrong, but my intuition says I might be crossing a very dangerous bridge, which is seeking hard money lender to start BRRRR without much money in my savings

I'd appreciate all advice that you guys could comment. Thank you all and Merry Christmas!

[Joseph A.]

Originally posted by @Paul Chae:

Hello Fellow Biggerpockets users. I have a question regarding hardmoney loan for BRRRR.

Let me describe my situation

- looking to get around 100k from hard money lender to start BRRRR. Not much saving at the moment.

- working with Fund and Grow, an entity that helps with getting fund, but was not successful to get business credit right away as advertised, heard that I need to use personal credits only for the next 6months to build relationship with the banks, which I feel is too long for me to start.

- After the banks went through my credit history, my credit score went down to 695-715 ish from 735ish.

- I am a nurse in nyc, work 3days/wk 12hour shift

- currently on 1 month vacation, moving on to a next job in mid January , annual income is 90000-105000

- target properties are going to be distressed, $40000-$70000 range in any adjacent areas of NYC.

I looked up what hard money is, how they work, etc. But I am still wondering if "my" situation suits for this type of loan? I'd love to jump in if there's reasonable amount of risks that I can recover if anything goes wrong, but my intuition says I might be crossing a very dangerous bridge, which is seeking hard money lender to start BRRRR without much money in my savings

I'd appreciate all advice that you guys could comment. Thank you all and Merry Christmas!

 Hard Money lenders are going to want you to have skin in the game. They will usually require you to put down at least 10% of purchase and rehab, some lenders will lend 100% of rehab with the 10% down payment on purchase price only. You will also need to have money for closing cost something I forgot to account for getting my first hard money loan. I also went over my budget and had to come out of pocket to finish rehab even though I accounted for a 25% contingency in my rehab budget. Investing with not much savings could land you in a situation you don't want to be in. I would suggest you partner with someone more experienced or lean on a more experienced investor to guide you through the process.