Hard Money, Commercial Lenders and More For Investors in Fort Hood, TX

Takeaways

• Finding money to do a deal is easy if the deal is a good one
• Fort Hood is probably oriented more toward long term rentals / buy and hold deals

Hard Money Commercial Multi-Families Private Money

Hard Money

What is it

Hard money is short term financing at a very high interest rate (usually 12-15%). These are designed for flip-type projects that you are only going to hold onto for a few months at most before reselling. Because hard money is expensive, you need to know what you are doing to avoid costly delays, and a big profit cushion to absorb some of the lending costs. Some lenders allow you to convert a hard money loan into a long term loan.

If interested in flipping or “whole-tailing”, be sure to check out the Bigger Pockets Flip Calculator.

Where to find it

Hard money can actually be difficult in the Fort Hood area. Many major hard money lenders want to be within a 50 or 60 mile radius of a major metroplex like Chicago or Dallas. Killeen is just outside of that radius for Austin, and therefore some hard money folks are uninterested. DHLC Investments out of Dallas is the only hard money company I am aware of that will do projects in the Fort Hood area.

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Commercial Lender

What is it

Commercial lenders lend on commercial properties – apartments (5 units or more), retail space, industrial complexes, restaurants, etc.

They also can help you refinance a property for which you paid cash, and might be especially helpful for those pursuing the “BRRRR” strategy. Obviously, be sure to check out the Bigger Pockets BRRRR Calculator.

Unlike 1-4 family residential loans, commercial loans tend to be more creative, including adjustable rate mortgages (ARMs) and balloon payments. Unlike 1-4 family residential loans, they are far less interested in your finances (debt-to-income ratios, income, etc) than they are the underlying collateral (the property).

Where to find it

Commercial lenders like forming long term relationships with their clients, and vice versa. If you have a small town bank or credit union you belong to, I would start there. Here in Killeen and the Fort Hood area, I know a BRRRR investor who uses Extraco banks for his refinances, so you may want to start there.

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1-4 Family Rentals

If you are just looking for SFH (single family home) or MFH (multi-family home) rentals with less than 5 units, you don’t need a costly commercial loan. You can just get a normal residential loan for investor financing. The terms and process is usually very similar to an owner occupant home loan, except you can expect a higher minimum down payment (20-25%) and slightly higher interest rates.

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Private Money and Money Partners

What is it

Private money is like hard money, except the money comes from someone you have a personal relationship with. This can be a friend or family member, but preferably it is an experienced investor, mentor, and/or partner. Especially wholeseller investors, who need to have someone else to buy their contracts, this is an important resource for them. Be sure to check out the Bigger Pockets Wholesale Calculator.

Finding a money partner can intimidate newer investors. Some feel like they need to have a “cash buyer list” before they even start trying to find a property. That is foolishness! If you can find a quality deal, finding the money to make it happen will be easy.

Where do I find it

Auction

I highly recommend attending the auction if you are getting started in investing. Investors with deep pockets show up to these, the Bell County one especially. It can be a great place to network and locate folks who can partner with you on a worthy deal.

The auction is the first Tuesday of every month starting at 10 AM.

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County Appraisal District

It might take some tedious copying and pasting, but you can use the appraisal district to look up folks who own multiple homes in your target market. Pick a street in a neighborhood you are prospecting, and quickly search owner names to see if there are any who own multiple addresses. Or, to get through more quickly, just scan through looking for LLCs or other incorporated property owners. You’ll have a name and mailing address at that point, and already in touch with someone who owns and probably likes property where you are targeting.

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MLS

The MLS can be handy for spotting investors who are buying up multiple multi-families or foreclosures – investor friendly property types that make their way to the MLS.  The list of recently sold multi-families and foreclosures is not super-long. It is possible to quickly look through and identify folks who are in the market for properties now. Most Realtors, investor friendly or not, who know their way around the MLS should be able to get you a list without much effort.

Network

• Search Facebook for local investor groups (some may be closed, private or secret, however, and need an invite)
• Check out local Meetups (like ours here)
• Go to local clubs, like the Austin RENC
• Get a profile on Bigger Pockets and search / post on forums. You can set up an alert with the cities you are interested in, so you hear whenever someone is talking about your area.
• Ask local title companies (like Netco) if they have relationships with investors that they would be willing to connect you with. Better yet, ask if they know anyone looking to sell properties. Maybe you can find a money partner and a deal!

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Conclusion

There are lots of options for financing for an investor. The trick is finding a great deal. In my experience, you won’t have many issues getting the money sorted if the deal is solid. Don’t be shy! The investors I’ve seen succeed are aggressive and go out and make things happen.