I know I promised I was going to post more, BUT… We actually started doing something that we have wanted to try for quite some time – real estate investing. I have a few friends that were into it and they were always telling me I needed to give it a try. Well after spending a ton of money learning what it takes to get a real estate deal done and not losing your ass, we finally did a few deals – and we love it!
Since we have been doing it and telling our friends about it they often ask how we are able to purchase properties. They knew we didn’t have thousands of dollars laying around to buy properties, much less do the repairs and get them ready to go to market. So how do we do it? The answer – Hard Money.
Here is a good article that explains exactly what a hard money loan is and when and when not to use them for real estate investing:
If you are new to real estate investing you may or may not have heard of a hard money loan. You may want to start flipping houses, but don’t have all of the cash necessary to complete the transaction. This is where a hard money loan might come in handy for you. In this short article we will cover what a hard money loan is and when to use them in your real estate investing business.
What Is A Hard Money Loan?
Joshua Dorkin wrote a post on Bigger Pockets that explains what a hard money loan is:
Hard money lenders (HMLs) are typically private individuals or small groups that lend money (Hard money) based on the property you are buying, and not on your credit score. Usually these loans cost (percentage-wise) much more then an average mortgage, often times up to twice what a regular mortgage does, plus high origination fees….
Hard money loans are easily accessed and cut through the red tape. If you can develop a relationship with a LOCAL hard money lender, you can get funds within a couple days, and sometimes with no appraisal or other costs (except for origination fees of course).
Read the full article here on this blog about wholesale deals
If it wasn’t for hard money we would never have been able to get started with our first fix and flip. As to date my boy friend and I have done 6 houses and have made some really nice profits. We highly suggest that if you are thinking of getting into real estate investing you go ahead and make the leap of faith and do it.
So what if you have no idea where to start. The good news is that there are plenty of websites out there to help you get started. And if you live in or close to a large city, there are always real estate gurus coming through towns that teach the basics.
Here is a video that maybe of a big help to you:
Cool, huh. So now you know what we have been up to. If you want to learn more check out some of these great blogs: