Experience can get you far, and that's especially true when it comes to real estate investing.
Banks and other lending partners consider an investor "experienced" if they have completed one project in the last three years, and investors who have complete three or more projects in that time frame can expect even more favorable terms.
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A first time investor can expect double digit interest rates, a 20-30% down payment, and roughly 2-5% in closing costs and other fees. Once that investor completes the project, rates get better. Seasoned investors can generally anticipate closer single digits interest rates, closer to 10% down, and 1-3% in closing costs. As experienced investors know, sometimes projects don't go according to plan. Once the lender sees a client can handle all the aspects of the projects, like managing contractors, pulling permits, and running a large scale rehab, it gets easier and cheaper to invest in your next deal.
As investors gain experience and see their portfolio grow, those projects can now be used for equity to help increase cash flow, and the investor can also explore more financing options, like adjustable rate or interest only loans.
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