Updated about 10 years ago on . Most recent reply
Hard Money Question
A thought just occurred to me, and I thought it would be good to ask the question here, to see if my head is screwed on straight.
Let's say that I come upon a property that meets all the criteria of a good deal - a GOOD deal. Because it's so good, I want to do this deal for myself, not wholesale it and give it away, even though I could make a nice chunk of change doing that. But, being new, I have little money and being a recent student with a new family, iffy credit, so, I'm not going to easily be approved for a loan, and I don't have cash on hand to put down enough to make a creative deal work. Let's say, for the sake of argument, I need $5000 cash to make the deal work creatively. Is this an area where I could use a hard money lender to get the $5000 I need to make the deal work and then, with title in hand, go to a lender and get a refi/rehab loan with the property (with decent equity) securing the debt, allowing me to get the loan, even with weak credit? Of course, the next step would be to pay off the original owner, the HML, and rehab and rent the place. Is this a good use of hard money, or am I fundamentally misunderstanding something?