Using hard money the first time

[Tim Hogg]

I am new to BP and I am currently looking for my first deal in northern Utah. I am also looking into ways to get the money, so my question: Would you suggest using a hard money lender for my first deal, or only when I have some more experience?

[Michael Seeker]

Originally posted by @Tim Hogg:

Would you suggest using a hard money lender for my first deal, or only when I have some more experience?

I'm assuming you're looking to do some rehabbing. How do you plan on purchasing properties if you don't use a HML? You may be able to find a commercial lender or conventional lender that will loan to you, but you need to have enough capital to put ~20% down and cover most/all of the rehab. If funds are tight, then a HML would be the way to go, as they will typically loan rehab costs as well. If you have a great deal to present to them and can convince them you'll get it done, you may not need the experience. The terms probably won't be as favorable as if you have 5+ rehabs under your belt though.