If i am unable to qualify for a good loan through a traditional lender, is using a hard money lender a good way to go?? I talked to someone today and they are a hard money lender and charge 12% and no pre penalty fee. I want to buy homes and use a lease option as an exit strategy. any suggestions
I’d suggest reading up a little more on what you’re getting into. Familiarize yourself with typical hard money terms. For instance, what does the 12% refer to? The up-front points or the apr? If that 12% is up front, you’re looking at some very expensive money.
If you want to use Lease Option as an exit stratedgy why not use it as a buying tool also?
herbster
I know a lot of people using hard money loan to buy and fix a property and then refinancing it to keep long term. It is a great way to leverage into a property. That being said I also like the idea of using lease options to buy homes.
This might be totally off the topic, but I didn’t want to start another thread and break the rules.
So, I can use a HML to obtain a POF letter so that I can wholesale properties listed through a realty company? In theory, I can contact HML contacts that I have, however, I need to have put an offer in on a property before a HML will take a look at my deal, correct?
In contrast, realtors who need proof BEFORE going forward, are not good ones for me to contact to wholesale properties.
If you’re simply just going to wholesale and not rehab the property you may want to look at lenders that specifically do double closing financing. You’d have to have your end buyer completely lined up but the lender doesnt need to take an application, pull credit, or verify income/asstes. The funds are wired to the title company which would payoff your seller and would go right back to the private lenders when your seller closes. Cost of their financing is taken out of your proceeds so you dont have to come up with closing cost either.
Again, this is only for situation where the funds are need for the day so you can technically close.
I provide lender letters for my wholesalers clients all the time. They get pre-approved with me so they can get letters for the offers but almost never close on a house. They pay me back be referring their buyers to me when ever they can. I suggest trying to build a similar relationship with one or two lenders in your area. I also agree you will want to work with someone who can do a double close.