hard money questions

[NHinvestor]

I have had a little confusion with hard money on a few topics.

1. The lender requires several points for the loan. Are the points financed or paid up front?

2. If I offer to pay cash I either have to have the cash, quick access to cash or use a HML correct?

3. If I use a local bank to do a rehab does this mean that I am not paying cash?

4 In steve’s course he explains how to lead everyone to your lender to make sure that the deal closes. He directs people to a HML so this means he can offer cash on every deal that he wholesales?

5. If you offer to pay cash this means that there is no financing contigency correct?

6. Do local type banks lend on properties that are real run down? Is this the reason that some deals have to be cash?

[REIforNewbies]

@NHinvestor post:1

I have had a little confusion with hard money on a few topics.

1. The lender requires several points for the loan. Are the points financed or paid up front?

   It depends. I would say “normally” financed but not always. The beauty of HMLs is that they are individuals who operate under their own guidelines. They may also have different “rules” in the beginning until you can prove you know what they are doing and have earned their trust.

2. If I offer to pay cash I either have to have the cash, quick access to cash or use a HML correct?

   It depends. Normally yes.

3. If I use a local bank to do a rehab does this mean that I am not paying cash?

   If the bank is loaning you the money you could be paying cash (using a bank’s loan).

4 In steve’s course he explains how to lead everyone to your lender to make sure that the deal closes. He directs people to a HML so this means he can offer cash on every deal that he wholesales?

If you are following Steve’s course it might be best to ask Steve what he means…If he’s wholesaling, he doesn’t need money because he is not buying the property. If he is directing his end purchasers to his HML then he is controlling the deal to make sure his end buyer can obtain a loan.

5. If you offer to pay cash this means that there is no financing contigency correct?

   Not necessarily.

6. Do local type banks lend on properties that are real run down? Is this the reason that some deals have to be cash?

   It depends on the bank. One of the biggest advantages to “cash” is that you are able to offer a quick close to an owner which can often help you get the property cheap.

[NHinvestor]

thank you for your response