Hard Money or Assignment of Contract

Hello,I’m a new investor ,along with my husband. We have a home that is pending contract.
We are looking into using Hard Money/Private Lenders ,but due to our insufficient credit and scores we have had a few distractions finding a lender that is not strictly credit score driven. So, with that being said ,we are strongly considering an Assignment of Contract. We do understand that with an Assignment of Contract our profits are limited (but we do not have to use our credit or money). And with the Hard money you will have to use some money(even if it’s a very small percentage) and credit.
We just wanted feed back from other investors on what to possibly do in this scenario. Continue looking for Hard money loans with terms that are not credit score driven? Or just bail out quickly and do an Assignment?
Any feedback would be greatly appreciated. And, thanks a bunch, in advance,

Assigning a contract may be your best choice if you have limited capital. However your profits are also smaller as is your risk.

Many HMLs (including DHLC) are NOT credit score driven. We look at the property to secure the deal. This means that while you have a underlying loan obligation and greater risk, if the deal makes sense your profits are much greater then just assigning a contract. This article may help you understand what to look for when assigning OR rehabbing a property.


Good luck!

I am a big fan of HML. If the deal will support the cost, it is a great way to beat the competition. Banks won’t loan on these properties so your only competition are people with hard money or deep pockets.

If you want to be in real estate, you need to get that credit fixed. After you do this deal. When you get that $30,000 check at the final closing, don’t buy a car with it, don’t go out to dinner with it, don’t take a vacation with it, take it and spend it all bringing down your credit card balances. This I would use to position myself to be in the game. You want the total balances to be no more than 30% of the limits. All the money you pay to bring the balances lower than 30% is wasted as that 30% will get most everybody into the 700 range.