General Real Estate Questions

[Dan Colantonio]

My main issue right now is with houses where I am located, they are expensive and investors pay cash for foreclosed homes. It is very difficult to get your hands on one. I am considering a hard-money lender but do not know the details of how they really work. If I want to flip a house and use a hard money lender to buy the house with a 9% interest rate, I would have to try to rehab the house and sell it within the first month before I have to begin paying the mortgage payment? What if I do not have the money to cover these payments especially with the 9% interest rate?

I am really just asking for other people's processes when using a hard-money lender

[Dan Colantonio]

Originally posted by @Travis Watts:

@Dan Colantonio Good question. I have never done a deal without having adequate cash reserves on hand. If I were using your proposed strategy and I thought the flip would cost me 50k, I would have 75k on hand (a 25k buffer). If I thought it would take me 3 months to turn around, I would underwrite for 6-9 months just in case. I am considerative, but I believe preservation of capital is always #1. Best of luck! 

Thank you Travis for your post. I will definitely look further into this.