There are many ways to fund your deals.  One of the ways is something called Hard Money.  Getting this type of is from a hard money lender and a not a bank or conventional methods.

These are people or organizations that have money and can lend it quick and fast.  They will lend you money based on the real estate deal itself and not you and your own personal credit.  This is one reason why people go for hard money.

Depending upon the lender they will usually look for a property at 50 -70% of the ARV - after repaired value.  This may vary by area but that is the general range.  The interest rate is usually usually high and is usually around 11% - 17%.  They will also charge anywhere from 3 - 8 points which are an upfront fee you must pay for the money.  Finally they will usually lend you the money for a short term period of a few months to a few years max.

Hard money lenders are able to close fast on the house because they are using cash.  You won’t be qualifying for any conventional bank loans where that will take months and months to qualify and close.

Many real estate flipping beginners will look to hard money lenders for their first few deals just to get the experience at real estate flipping.  Especially with our current mortgage crisis in the United States using conventional bank financing will be to slow and may not be what you want at the moment.

That is why you will need to give hard money lenders and chance.  While it may be a steep price to pay, it doesn’t compare to getting the flip completed and onto your next one.

In a later post I will show you how to find cheaper money for more experienced real estate flippers.

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