New to Investing: Hard Money Lenders

[Devin Maroney]

Thank you for taking the time to read this. I am new to investment real estate as I have decided to make a complete career change following a personal tragedy. I currently have my real estate license and an education in interior design. I understand other financing options but given that I haven't flipped a home and only sold one home in my short real estate career I require something along the lines of hard money lending. 

Can someone please help me understand how they get started with financing a flip? 

[Katherine Robbins]

Hi Devin, 

You can start with a 203k loan if you want a simple process that can walk you through all the steps along the way. This is a renovation loan that a mortgage company can offer that will wrap your rehab costs into the mortgage and they have steps along the way that you have to follow so it's very hard to screw things up. They have an FHA program so you can get in low on your first purchase. There are some limitations on time and if you live in the property or not which is the only downside BUT if you can figure it all out, it's a great stepping stone. After that, you can use the Homestyle renovation loan for more conventional mortgages. OR maybe after selling your first one, you'll have enough cash to use a hard money lender.

I used hard money lending when I got into flipping houses but it's complicated to figure out exactly how much cash you need. If you can find a lender that will allow you deferred interest payments, then you will be way better off with the amount of cash you need. I did a cheap property for my first one and only put $23k down and wrapped my payments to myself into the renovation budget so I had money to live on while the renovation was happening. 

Happy to answer any questions. Good luck!