I’m new in re investing, but quite anxious to finish my first wholesale deal. I am talking to an agent about a bank owned property and he is telling me I need to have pre-qualification before I make an offer to the bank. I have no $/no credit and a possible end buyer. What’s my best way around this requirement?
Some lenders (not regular banks like Bank of America,etc) will give you prequal letters without checking your credit or income.
Try to get one from a hard money lender. Call them up and tell them what you are trying to do, you should be able to find one to give you a ‘proof of funds’ letter.
Keep in mind that you will have to make a deposit of usually 1000k -2000k Earnest Money on Bank Owned REOs.
Banks won’t accept offers without Earnest Money…at least from what i’ve experienced and seen.
They don’t want to tie up a property and lose the time and money if someone backs out of the deal.
Also of course make sure you have an inspection period so that you can get out the deal if need be.
Good Luck
Investorman,
Thanks for your reply. I’ll reserach the hard $ lenders that may be interested.
There are resources under “Investor Resources” on the leftside of the screen that might be helpful if you haven’t looked there already.
Also you can try to Google “Hard Money” and the name of your state …this should bring up a list of some lenders.
There is also transactional financing such as http://www.coastal-funding.com/ . I think this is the most popular transactional / Flash Funding company . They basically loan you the money to fund your end of the deal ONLY if you have a buyer lined up. They loan you the money basically for a couple of hours…to do a 'double closing" . They are financing the A to B transaction , but they will not financing B to C (the end buyer/your buyer).
The end buyer is not set in stone. The end buyer wants to know my selling price first. I don’t have a selling price yet until negotiations with the bank are completed. Will hard money lend if my intentions are to sell within the first week of my A-B closing?
Hard Money doesn’t usually care. Most of them do not have PrePayment penalties. They are making points on the loan up front
Hard money loans are intended to be short term loans anyways.
Only thing is if the end Buyer is using an FHA loan…then you need to wait 90 days to sell it.
But if it is another investor that is not using the loan as a primary residence then they probably won’t be using an FHA loan.