Quote from @Jay Hinrichs:
Quote from @Darius Ogloza:
@Hannah Espejo In answer to your question, yes, there are lenders out there who will loan solely against the subject property BUT those lenders are going to require some margin of safety in the event the asset will need to be repossessed and sold UNLESS you have an impeccable track record with them. As a newbie, it is simply unrealistic to expect someone to loan you more money than the asset is worth as is. In your shoes, I would try to find a more experienced partner.
exactly and do NOT fall for scam lenders who will approach you based on this post or any lenders on Social media you simply do not have the reserves and experience to borrow money from anyone who is not your close relative or very close personal friend. RE Flipping is a hugely capital intensive business with competition these days through the roof.. Frankly and please take it as intended but I am shocked an agent would be working with you when in reality you have no capacity to transact.
Take this time to go to meet ups bird dog for some investors for some fee's to build your cash position.. no one should be flipping houses if they dont have at least 10% cash up front for the purchase and 50k or more in reserves.. U can Try Do Hard Money but be aware they promise 100% but then you have to pay 3k for their materials and then I think based on other posts here on BP its 600.00 per submission for underwriting and you need EM to tie up the property in the first place.. so you can see how 6k will really get you no where.. Now it would be interesting to see if DHM would take your 3k based on only have 6k in liquidity. Plus I believe based on previous post about the company you have to front the rehab and wait a few weeks for the draws to process so you need the rehab money up front.. almost all lenders will require the same thing.. do the work first prove it then get a draw.
Understand your desires .. But there is a reality check in RE there is a ton of hyperbole in this industry and I can see how folks get sucked in.. its the old AMway pitchs get the life you deserve etc etc.
Thank you so much again for all your responses I really appreciate you taking the time to give me all of this info as I will be fully aware of scammers out there because I have talked to a few people I even had a guy laugh at me. But I understand it is the reality and instead of doing the Hardmoney route I decided to go a different route instead. I am looking into different creative ways to do this to start out. I ended up saving a little more with 10 K. And as I have mentioned above with many sleepless nights this agent actually reached out to me after I emailed him who knows a few bird dogs in the area and off market properties but I don’t want to give up because the second we give up we are right around the corner to success.
I found a great lender and am deciding to go the 203k FHA route with using my CHFA approval with 3.5% down and will stay during a slight rehab between 6-12 months then refi to conventional 🥰🙏
