Finance: My Biggest Fear

[Clifton Brown]

I joined BiggerPockets as a Pro member this week.  Basically, I'm a newbie in Oxon Hill, Maryland.  If you don't know where this is, it borders both Washington, DC and Northern Virginia.  The Potomac River pretty much separate the three locations.

I know my niche which is flipping (rehab and resell) houses. I'm reading and getting involved with:

• J Scott - "The Book on Flipping Houses"
• J Scott -  "The Book on Estimating Rehab Cost"
• Rick Villani and Clay Davis (book and audio) "Flip - how to find, fix, and sell houses for profit"
• Joining BiggerPockets as a Pro member
• Visiting my local REIAs for seminars, webinars and networking  

I'm starting to see where my biggest fear is starting to take shape:  FINANCING

My biggest concern it finding the right private lender without getting scammed before my first deal.  In other words, how to smell and avoid "shark" private lender(s).  BiggerPockets have plenty of info how understand and avoid predators, however, I don't want my excitement of my first deal to get the best of me either.

I see the BiggerPockets Calculator but I'm still stuck on: where to find HML/Private Lenders, going interest rates, average points (1 to 20), making sure to include quiet costs....etc.

[Jean Bolger]

Another idea- go to a local hard money lending company that does it as a business, not a "private lender". Look for someone that has been doing it for several years and can give you the names of flippers they have done a lot of deals with. These guys may charge more, but they should also have the experience to tell you if the deal you bring to them is a good one. Local is important- they will understand your market. If they won't lend on it, find out why. You should think again about trying the project -- they are not in business to take houses from you (it's a hassle not a bonus). They'll want you to succeed so you'll borrow again.