Financing for first flip

[DeMarrius Payne]

I am needing help finding financing for my first flip. I am most likely looking to do hard money. I have about $10k that I will borrow from my 401k. With the lenders in my area, I'm not sure if that'll be enough to cover fees. Any suggestions on lenders who will take smaller down payments? Also, how do you guys feel about taking out a small business loan to help finance the flip. Essentially borrowing the money from a bank is the same as borrowing from another person. Just pay the bank back after the house sell, right?

[Stephanie P.]

@DeMarrius Payne

Not to rain on your parade, but you're not financially ready to do this.  

Your hard money lender is going to require you to put down between 20 and 30% of the purchase price and then have 3-6 months in reserves.  You're also going to have to come out of pocket for some of the rehab work because it's paid out in draws.

Now... 

what I would suggest you do is purchase a 4 unit or so property using FHA and live in it for a year. The 3.5% you'll need for down payment will dictate the size house you buy based on the amount of cash you have. Just back into the number. I'm sure Greensboro has some houses that have multiple units. Look over by UNC Greensboro.

I would do a few of those for the next few years.  Enjoy their cash flow while you can still get a good deal on interest rates and then start flipping after you've got a cushion.  If you need a 203K guy, PM me.   We don't do them, but I can recommend one that's very good.

Hope that helps,

Stephanie