If I am trying to get involved in fix n flips what can I expect from a Hard Money Lender, I have seen some advertise “No Credit or Income Check.” So curious what they are going to be asking me to show them??
They look mostly at the property, and then at your experience level. They typically will lend 65% of the value. If you think the property is worth 1m as is, and 1.3m after repairs, and because you buy it off-market (knocking doors)… for say 700k… then they will lend you 65% of those 700k… unless their own valuation is even lower.
If you plan to buy from the MLS, chances are that they will think that you overpaid… and lend less.
Just be prepared to put a lot of your own money down.
Thank you. Yeah I spoke with a broker/ house flipper over the weekend. He told me the hard money lenders he knows won’t even talk to a house flipper unless they have $100,000 cash set aside in the bank.
So did you talk to the hard money lender and if yes, how did it go? Did they ask you specific questions and requirements? I am just curious about what they want exactly
I haven’t spoken to anyone yet. I was going to networking events before covid, so I met a few people. Then when we got shutdown just about everything got put on hold. I am unemployed right now, so I guess I am in the research phase of this again. I was thinking about starting to wholetail and possible living in the property I am wholetailing. but like I said I had a broker tell me that most hard money lenders won’t even listen to you if you don’t have $100,000 cash in the bank ready to go. Any advise is greatly appreciated.
What ptiemann said sounds spot on. You will need lots of equity. If you don’t have lots of that, your best route might be to find a partner. Think about what you have to offer them if they are fronting the money. Get some experience while you build up some reserves. I think elt1 posted about this topic in the past or it could have been ptiemann. Good luck.
Hard money lenders are looking to make money. If you have no experience and no money, you have nothing to offer them. If you can lock down an incredible(with equity built in) offer then you add some value but you will still need a partner with experience and money. Or least one that has access to money.