Hope you could share ideas so that first time investors would know what to avoid when borrowing hard money and ensure that they get approval FAST.
What are the most common mistakes new investor does when borrowing hard money for the first time?
Using hard money for anything but locked on flips, meaning that you have your buyer lined up before you buy and renovate. Almost all other strategies have too high of a risk to loose your down payment.
Redhawk
Not sure why doing a deal without an end buyer is a problem. I purchase so that all points and fees are rolled in, no money due at closing (ideally, but let’s be honest, some at closing). Loan for 70% LTV. Pay the interest payments (9.5% ain’t bad) for 2 months during renovation, market for two months (don’t list or you will have to wait 90 days to refi), if no chance to sell, refi at 75% LTV. The spare 5% covers closing and other misc costs. So, in the worst case, I pay about 5 months interest out of pocket, then rent for at least $200 positive cash flow per month.
Overall, it would be cheaper to buy with 20% down and rehab costs out of pocket, but who wants to put up their own money when someone else is willing for relatively minor expense? Plus, several deals can happen at once.
My newb two cents anyway.