House flipping hard money loan

[David Kors]

Hello everyone! I currently reside in Chicago Illinois and I was thinking to take a hard money loan for rehab properties. Would that be a good idea? If yes, which private lender would be the best in chicago area? And what happens if things start to go south and take a loss? Would the property just be foreclosed or would you be bankrupt? Not that I want that to happen I would definitely work with a real estate investment broker or realtor and make sure in which ever property I invest in is worth it.

[Vincent Incopero]

@David Kors There are plenty of reasons to take hard money and there are plenty hard money lenders in Chicago, ranging from private parties (ie. Mr Money Lender) to companies like Renovo and Barnett.  

If things go south, the lender will seek to enforce it's rights under the term of the mortgage and would likely foreclose.  Bankruptcy is a borrower's remedy that is available when you cannot meet your financial obligations as they come due (ie you owe more than you can repay on a monthly basis). 

Reality check: Working with a broker or a realtor is not a fail safe and will not ensure that you are making a sound financial decision or that a project will be profitable.  While you are scouting deals with brokers/realtors, you would be wise to associate with and work closely with an experienced rehab contractor to give you an honest assessment of what it would take/cost to make the repairs and an estimate of what you could expect to see, in terms of financial returns, for your efforts.