The path to MY FIRST deal

[Eric Roloson]

A hard money lender is the way to go in my case. I put addendum in the purchase agreement that it would be contingent on me getting the financing. The selller was ok with this. Rather than wait for HELOC and run out of time with documentation and slow paper pushing through numerous people and underwriters, I found a hard money lender.

I recommend if anyone go this route, shop around. They all structure their loans differently, and will fund in different ways. I found some are very legitimate and offer a good product with clear terms. Make sure you understand exactly what the origination costs are, other (junk) fees, prepayment penalties, length of loan, extension fees, draws if they are funding rehab, etc. Also, i would suggest finding one locally that is familiar with the area that you can meet face to face and build a relationship with. If you have solid exit strategies in place and figure your cost of the loan into your potential profits you should do well. My margins are excellent. Yes, the rates are quite a bit higher than traditional banks. But now I have the ability to not only acquire the property through funding but also get the 100% funding to rehab it! I either use a hard money lender and make significant profit after all costs (including hard money loan) or no profit at all. Keep in mind, I don't have a rich uncle or friends I can borrow from. The key is be prudent and have a strategy! I have a choice, I can either lock in a deal with a hard money lender or not get the property. I know what I would do, what would you do? :)

[Kerry Baird]

It sure is easier, in terms of paperwork, to get hard money.  

But, I like to keep my houses as rentals for the long-term, so the interest rate is too high to really work well on those.  Some of those mid-interest lenders are intriguing, such as Visio, LendingOne, Dwell, FirstKey, and the like.