Posted by Brent_IL on September 24, 2003 at 24:06:09:
I would go with hard money all the way. Exact profit is never certain until you are completely out of the deal.
My reasoning is that because you’re asking for opinion, you probably don’t do a lot of these and are uncertain of the outcome. If things mess up, and you use all hard money, you might have to dump the house, but after that it is the lender’s problem. That’s why we pay the high rates to a HML. If you would use a HELOC for partial funding, you’ve increased the HML’s chance of getting paid. He?s happy, but you’re stuck with paying for an expensive seminar.
I am closing on a house Oct 24. My exit strategy will be to retail the property to an owner occupant at a reduced price. To finance the purchase, I could 1) get a hard money loan for 100% of the purchase price and have small out of pocket costs for holding costs, minor rehab, closing costs etc or 2)I could do a partial hard money loan/partial use of my current residence home equity line of credit.
My profit potential is greater with option #2 by using more of my money…but the risk is also greater. Any words of advice out there to help me make my decision???