Positive and negative to both....really depends on your liquidity and the specifics of the deal.
Credit Union
- Positives: low rates and fees...cheapest solution
- Negatives: requires money in the deal, sometimes will not fund rehab, slower close
Hard Money
- Positives: requires less money in the deal, faster, less difficult process
- Negatives: high interest rate, high fees
If it is your first deal I would suggest using a hard money lender just to remain as liquid as possible. You may need that capital as things pop up throughout your first project. Start with a smaller deal so you can get in and out quickly. Most hard money lenders also have experience in the space and can help provide valuable insight into your project. A little guidance is always good as you start. Once you build a capital stack and gain experience you can move to cheaper capital that may require a little more skin in each deal.
