All Forum Posts by: Katie Smith

Hey Alex! 

Connecting with other wholesalers is a great way to learn the ropes and find leads. They can share strategies that have worked for them, such as driving for dollars, networking with real estate agents, and leveraging direct mail campaigns. Building relationships with experienced wholesalers can also open doors to joint ventures and off-market deals, giving you a head start in the industry. Networking is key in wholesaling, so don’t hesitate to reach out and collaborate.

Welcome to BP, James! If you're ever in need of financing for an investment property - lets connect!

Hey Haley! 

It’s great to see your enthusiasm for diving into real estate investing and flipping houses, especially with your experience in home improvement and remodeling.

You raise an excellent point about using your own cash versus financing through hard money loans. Here are a few key considerations to help clarify why many investors opt for financing, despite the risks involved:

1. Leverage: Financing allows you to leverage your capital. By using a hard money loan, you can take on multiple projects simultaneously rather than being limited by the amount of cash you have on hand. This can potentially increase your overall returns, as you’re not tying up all your capital in a single project.
2. Cash Flow: Using financing frees up your cash for other investments or opportunities. This means you can diversify your investments rather than concentrating all your resources in one project. Even if you’re making interest payments, having liquidity can be advantageous in a dynamic market.
3. Speed and Scale: Real estate deals often require quick action. Hard money loans can facilitate faster closing times compared to traditional financing, allowing you to secure and renovate properties quickly. This is particularly important in competitive markets where speed can be a key factor.
4. Risk Management: While there is certainly risk with any form of financing, careful management and choosing the right lender can mitigate these risks. Hard money loans are often short-term and designed for projects with a clear exit strategy. Additionally, successful investors typically build a solid network and due diligence practices to minimize potential losses.
5. Reinvestment: Using financing means you can reinvest the profits from one project into multiple new ones, potentially accelerating your growth. Reinvesting your profits quickly can lead to a compounding effect on your returns, compared to the slower growth from reinvesting your own cash after each project.
6. Opportunity Cost: By using your own cash, you might miss out on other investment opportunities or market trends. Financing allows you to diversify and potentially capture more opportunities within the real estate market or other investment avenues.

That said, it’s crucial to do thorough due diligence and understand the terms of any financing you consider. Working with a reputable lender and having a solid plan for each project can significantly reduce risks.

If you decide to use hard money lending, it’s important to calculate your costs and potential returns carefully and ensure that the projects you undertake align with your financial goals and risk tolerance. Every investor has a different strategy, and it’s about finding what works best for your situation.

Hi Spencer! Look into a DSCR loan for your rental! You'll be able to get up to 80-85% LTV. Since you've owned your other rental for 4 months - you could also look into doing a cash out refinance to help you acquire this one.

Hey Hunter! Congrats on getting started so young! For new investors with limited capital, a hard money loan can be a valuable tool to get started. It offers fast funding, which is crucial for seizing investment opportunities before they slip away. Most HML's can lend up to 90% of the purchase price and 100% of the rehab. Happy to go into a fix & flip loan in detail with you over a quick call!

Hi Jorge! 

Welcome back to the lending world! You’re right that being in a first lien position is generally preferable due to the priority it offers in repayment. Second lien positions carry more risk since they’re subordinate to the first lien. Ensure that the borrower’s financials and the property’s value are strong enough to cover both liens. If you decide to move forward with a second lien, negotiate favorable terms. This might include a higher interest rate to compensate for the added risk and ensure you have clear terms on how repayment will be handled.

Getting back into lending can be exciting! Good luck!

Hi Jason! It sounds like you’ve got some promising properties on your radar! If you’re short on down payments, here are a few strategies to consider:

Hi John! One of the most surprising experiences I had was when a borrower with a seemingly high-risk property came in with a last-minute change to their scope of work. We had to scramble to reassess and adjust the financing terms quickly. To everyone’s amazement, the revised project not only met but exceeded expectations, and the property resulted in success! The process was definitely a rollercoaster, but the end result was incredibly rewarding. It just goes to show that with a bit of flexibility and creativity, even the most challenging situations can turn into wins! 

Hi Dozar! Welcome to BP! That sounds like a fantastic plan. Best of luck with your duplex and future properties! If you ever need a hand with funding, I’d be happy to discuss hard money options to help you reach your goals.

Hey Ryan! 

Attending local meet-ups in Abilene is a great way to connect with photographers, property managers, and interior designers directly. These events often attract local professionals who can offer personal recommendations, share their portfolios, and provide insights into their services. Plus, networking in person can help you build relationships and find trusted contacts within the community.