Finance Question for Rookie

[Austin Tess]

Hello all,

Potentially dumb question, but I'm new and spit balling. I'm working on strategies to get financing for eventual BRRRR. So, is it possible to get an outright loan for say 100,000 and use that to buy, flip and sell a house for a profit? I know this is a rookie question, so please no negativity.

[Pat Parrillo]

Not a dumb question at all, but getting a $100K loan with no track record is difficult. Traditional lenders won’t approve it, and hard money lenders who offer this type of financing all the time look for experience, assets, or strong equity in the deal.

Partnering with someone who has financing or experience is realistic approach when starting. That could mean working with an investor willing to fund the deal for a share of the profits or starting smaller with a house hack or live-in flip to build credibility, or putting sweat equity into a deal with a partner to learn and build your track record. All of these come back to one important factor, you need to bring value to the table while mitigating risk.

Lenders, Investors, Hard Money, Partners will focus on experience and risk, so bringing value by finding great deals or managing renovations, can help you break in.

Keep refining your approach and connecting with the right people!