A Hard Money Loan Just Makes Sense…
Those who do fix and flip projects often use the hard money loans offered by Best REI Funding. These REIs focus on total interest cost, not just interest rate. Our loans often close quickly, get good homes bought and get the work started. We don’t usually lend for the long-term in any one deal. Instead we work with a steady stream of short-term deals. Many are as short as a few months in length.
When considering the total cost of repairs, the person buying the property includes all his or her hard costs for materials and labor, and the hard cost of the total interest on the loan (interest rate times term.) When the house is sold after being fixed, the loan we gave is then paid off.
A fix and flip deal in Denmark, Wisconsin, is a good example:
- A single-family home of about 1,500 sq. ft. that needed work, with an owner who wanted to sell rather than fix the house himself. (Many people don’t like big home repairs.)
- Our buyer saw that the house had “good bones” but it would need a lot of work (electrical, plumbing, new drywall, paint in and out, etc.)
- As the lender, we thought the planned repairs was reasonable in cost and made sense. The After Repair Value (ARV) based on home prices in that area made sense.
- We had the money to lend, as our other loans had just been paid off.
Within 7 months, the repairs were done, with the house being sold for what we expected.
One reason we can spot deals that will work out is that Best REI Funding has focused for years only on Wisconsin real estate. We started as the investors who used hard money loans to rehab rentals and fix and flip houses. We know the market; we know all the challenges these deals can present to investors. We can spot the deals to avoid, and those that make sense.
This is why we have had such success investing the funds our portfolio partners trust us with.
If you have money to invest in real estate, but don’t want to work full time as a hands-on, sweat-equity investor, talk to us about joining our lending group. Get to know us and why we invest the way we do and decide for yourself how we could help expand your asset portfolio.