Best funding to use to for REO's and other deals

I recently put a bid down on an REO and didn’t have proof of funds, but they still allowed the offer… I want to find the best funding methods so I’m prepared for next time. I know HML’s. Can someone recommend good HML’s? I’d rather not put 20% down on my deals. If I have to, I can depending on purchase price. What about no interest credit cards for down payment perhaps? What about investor loan?

I want to find the best ways to fund my REO purchase deals because there are many REO’s in my area right now. Not just for REO, but I want to start putting many offers down on REO’s and need to have funding lined up.

I always buy mine with bank financing. You can go to your small local bank and they will give you a pre-approval letter that you can present to the bank that is selling the REO. Or, you could get a business line of credit that you could use to purchase the REO. Then, simply refi and pay back the line of credit. Rinse and repeat.

Good Luck,


Thanks for the reply Mike.

I’m not so sure about line of credit because I just opened my sole proprietorship about mid 2007 and don’t yet have any income or credit in the business to show for. Am I correct in saying I can’t get this personally and only for a business?

When you talk about financing through a local bank, are you referring to an investment loan? Couldn’t I just go to a broker and get pre-approved? Are you saying go to ‘small local banks’ in order to get 100% financed so I can avoid putting 20% down?

How would I avoid putting the 20% down OR if I had to but didn’t want to pull 20% out of savings what are the best ways?

Thanks again.


I’d recommend going to a local REI club and talking to people and finding a good HML. HMLs are pricey but the cost of money isn’t nearly as important as the availability of money when you have a deal.

2 words…local banks! They are your best bet. You have to find a lender that understands what you are doing. I found one where I pay zero down, interest rate at prime, with interest only on a 6 month note with all payments on the backend. A true no money down deal and this is with a local bank. You have to dig for the money but once you find it your business will take off.