conventional loan or hml

does it make sense 2 seek out a conventional if u plan 2 flip (maybe 2 another investor) wholesale. but hml ask 4 so much interest. any other alternatives?


Wholesalers usually do not get a loan. They don’t hold the property long enough. If you wholesale, you either assign your contract to another investor before you close or do a double close where you own the property for 1 day.


Howdy Kimesha:

Wilson is right, wholesale means to sell without even owning the property. If you do decide to close and resell hard money is expensive but to me the only way to go. I have bad credit and conventional is not even an option. If I can do rehabs without partners I do not mind paying the interest freight. I just closed on a $250,000 deal and paid $12,500 in points and 14% monthly. Cheap compared to giving 50% of the potential $100,000 profit to a partner where I will still have to make interest payments on the borrowed funds. If I had the cash I would use it myself. One thing is for sure, doing marginal deals with thin profit is not an option. It makes you find better deals and pass up on the potential losers.

Just a few thoughts to consider in your business. Good luck

Quickest and best money is “no close” flip. Several of my clients do this. They find undervalued homes, put a contract on them and usually have them assigned before closing. Closing costs eats up a lot of profit—trust me—I’m a real estate atty who does closings.

It’s getting harder and harder to find the “deals” I’m told because there are so many investor-rehabbers. That’s one reason why I stick to hard money lending. Plus, my work consumes most of my time. I would never have time to rehab house or be a landlord. Well, maybe a landlord. But I doubt it. Not when I can get 12% and a point up front.