As we embarked on the fix n flip industry, one thing that I continually realized was that there was a tremendous amount of jabber about hard money and private money lenders. There was a great deal of negative publicity surrounding this market. I began myself with trying to assist an associate in finding fix n flip funding, but also delved into lines of credit. This was a great deal of time involved, and there were so many different platforms.
One of the greatest nuisances that I personally discovered, in trying to secure funding for fix n flips, was the cap that you had to get over. If we own a property outright, and it may require eight-thousand in repairs, and have an ARV of $190,000.00, there were not many lenders willing to lend under $100,000.00.
I have come across a couple of lenders that I absolutely believe are on the up and up. Yes the interest rates are 10%, but often times, when you are dealing with OPM (other peoples money), this is how they generate their income. You can get better rates once you have a history of sucess with any given lender.
I can say this as well, when you are seeking a fix n flip lender, do not put all your eggs in one basket, no matter how favorable this lender may appear to you. Always have a fall back, or plan B when trying to secure your fix n flip loan.
Some pitfalls to avoid when working with fix n flip lenders. Make sure you know what your limits are. Make sure when you are budgeting, you budget for the entirety of the deal. The purchase and rehab are just two components of the bigger picture.
I bet Nani, but he wouldn’t that this page would index and appear on page one of the G, within a week from posting.