Is it possible to get financing set up (hard money, etc.) in advance (within certain requirements) and then locate a property?
For example: Plan to purchase a house retailed between $125K and $150K for 75% value or below. Use “rent to own” with rental based on full value. Get finanicng ready (for quick close) and then locate the property.
I have two reasons for this: 1. Being able to guarantee payment within 1 week should help get seller to agree to price. (especially if I include a check with the offer?) 2. If I wanted to buy at auction, I need money within hours, not days.
Has anyone had experience with this?
What you need to do is target your lender and ask about how much he will lend as in LTV, amount, (he may only have so much cash to lend out) in what parts of town he will not lend and how much of total purchase and fix up he will lend.
This way, if you find a deal, you already know if it meets his criteria and if he will lend to you. You can make your offers with confidence and know the funding will be there.
In the past my hard money lender said he would go to the foreclosure auction with me and take a check to help me buy properties. We never got together on a deal that way though. Their office here is now closed and they are located in California making it difficult. My lender wants an appraisal of the property prior to committment on the deal which is $300 plus and a week or longer to obtain. I have gotten them in as little as 8 hours but that was something that rarely happens. We were close friends and he owed me big time for some moving help. Anything you can do to speed up the process will make the sellers of your deals happier. You may contact some of your competiers that are advertising that they can close in a few days to see what you can find out. They may be using opm the same as you and me or their own money (TOM). I may have coined a new phrase. Good luck and let us know what you uncover. We all need some good news.
Ted P. Stokely Jr
11505 Sw Oaks
Austin, Texas 78737