Newbie with cash but no income where do I start..!

[Helen Davis]

Hi guys,

I am new here and could really use some help. I have just qualified as realtor and am planning to start generating income with that immediately. I have some cash to start my investment portfolio - about 200K but do not have any verifiable income - the business I have been running for the past couple of years slowly dried up. I really want to get going ( and start some cash flow!) but the best I can fathom is I could try to get some hard money loans but aren't these REALLY expensive and risky? Like wouldn't my cash flow need to be pretty healthy to cover me if rents/prices start to drop - does anyone have any experience of this they could share that would be so helpful!

[Odie Ayaga]

Theoretically if getting a hard money loan is expensive and risky you could characterize ANY loan as expensive and risky, they're just varying degrees. Is it more expensive and risky to get a 5% loan than a 4% loan? Sure, but it's just costs. Calculate them accordingly and determine where you stand and if particular terms make sense to make a deal work. 

Additionally, if you can't qualify for a conventional loan (or the property can't) then you have to deal with the options that are available to you, one of which is likely hard money. It's just a matter of deciding if you want to use that option, some other option you can secure, or pass on the deal. Typically hard money is where you go when you need short term rehab money, but there are long-term products now that are more expensive than what a conventional lender will offer. But again, if you can't qualify, it's something to consider. It doesn't typically cost anything to talk to some lenders and see where you stand, just make sure if you end up getting a short-term loan to refi into long term that you're long-term lender is set up ahead of time so you don't run into any surprises.