Cash Acquisition, Rehab Funding Needed

[Justin Puetz]

Hey, everyone!

So this is my first post here on Bigger Pockets and after listening to several of the shows, I'm very confident that the community here can help me out! This situation is this: I own an LLC with my two brothers in Minnesota. We have flipped one house so far and this will be our second. On the first house, we couldn't get it financed because we are very young (23, 21, 16), we don't have exceptional credit due to our ages (and the fact that I have a bunch of business debt on my credit cards - lowering my personal score), and we really have nothing for personal assets yet, making us far from the ideal borrower. We have purchased the second house in St. Cloud, MN using all cash. This transaction tapped us for almost all of our cash, we did this in hopes of breaking through the "traditional financing" route by having an asset to put a lien against. My biggest issue with this is that I'm worried about applying to traditional banks, having my credit pulled multiple times and dropping my credit even further, just to find out that we are not qualified borrowers.

My question is this: For this situation (and flipping in general), is it better to go through the process of a traditional lender or go the opposite route with hard/private money? Ideally, I would love some advice for how to quickly finance the rehab of this property (of which we own 100%) based on our particular situation.

Any help would be greatly appreciated, thank you all so much for your time in advance!

Justin Puetz

[Marc Jolicoeur]

If you are going to be all-in for less than 75% of ARV I am pretty sure hard money is your answer.

The payments cost more per month but you are also going to leverage the experience of the lender to ensure you indeed have a great deal to flip and they will get the opinion of an appraiser too.

I don't know for sure but I do not thing multiple inquiries will hurt your credit score. You can shop around.  Your score takes a hit for the credit enquiry whether you have it checked  once or 5 times.

Plus bankers will only pull credit reports to confirm what you told them up front.   They should pull credit only after they have already decided that you would be a good lender.