All Forum Posts by: James Williams

I have definitely looked into it.  The options I found were super expensive.  I mean like 6.5 origination points and 1.5% monthly interest payments on the full amount of the loan, not just what I have used.  Others won't lend to me because I don't have any experience flipping.  I would definitely have to either have more capitol or find a willing partner.  Or both!

 I looked into GAP funding or a bridge loan. I decided I didn't want to go that route.

I agree 1000%, but that is why these forums exist. He put his self out there and asked the question and I'm sure he learned something. You are absolutely correct though, if someone doesn't understand those intrinsic numbers, they are not ready to jump in. That is definitely why we are here though. 

@Tommy Daggett that is not a dumb question at all. Most hard money lenders will not cover your project 100%. They want you to have some skin in the game. Though they specialize in asset based lending, they lend based on the after repair value of the project. I as a newbie flipper could come in and completely botch my budgeting and if I cant handle the interest payments they may have to take the property. Also, beyond the initial numbers for the loan, I would need at least a 10% down payment for the purchase price of the property. In this case, that's already $8,200, and that does not include closing cost. I need about $15K total to close the deal. As far as reserves, beyond the purchase and closing cost, I would need money to start the rehab project. Hard Money Lenders typically work on a draw schedule. I would front the funds for a scheduled portion of the work, they send someone to inspect and verify that it's done properly, then they reimburse me for that portion so that work can continue. Repeat that cycle until project is complete. Not to mention utilities and incidentals. All of which are part of my carrying cost along with the interest payments. I would need about $25K minimum in reserves if I use most Hard Money Lenders. If you have any questions about this, send me a message and I can give you a call to discuss the whole process.

@Neetu Nagi if I had better credit and DTI ratio, I would just get gap funding. The zip code for this particular property is 28677. But I run into these deals all the time.

@Timothy Lewis nope, not at all.

@Michael Plaks wow is that really feasible? I have some research to do. That sounds like a great plan.

 I'm thinking you are right. Thank you for the input.

@Aaron Flake at this point I wouldn't mind taking on a partner. I will try to find one.