Funding first deal with mortgage

[Joshua Feasel]

Want to know some honest option about getting a mortgage for the first deal. I have heard it all the time that people uses private money lender, hard money lender, partners for funding a deal. But never really heard people use mortgage. 

Now my question is, is it worthy to use a mortgage for the first deal and get it refinance? Is there some sort of limition on this method? What are the pros and cons?

[Nghi Le]

You need to provide a little more context in what you're trying to do. It sounds like a BRRRR since you mentioned refinance. And I'm assuming it's a residential 1-4 unit property?

Most people don't use banks because either the property doesn't qualify for it (i.e. really bad shape) or they themselves don't qualify for it (high DTI, lack of W2, bad credit, etc). Another reason might be they're in a competitive market, and cash offers with a 2-week closing window usually beat out the 30-45 days needed for a bank loan. Or maybe they're buying a wholesale deal off-market, and banks don't like the fact that an assignment fee is involved.

Hard money is more expensive, but usually gets the job done quickly.  Sometimes you can also pay less down payment going through a hard money lender than a bank.

Of course, all of this is assuming it's a non-owned occupied investment property.  If it's going to be owner-occupied, hard money isn't an option and you'll have to do a bank loan, private money, partnership, etc.