Getting A Hard Money Lender To Fund Short Sale & Foreclosure Acquisitions
Finding money to finance foreclosure and short sale deals is a primary reason that most “would-be” investors never get in on the incredible action. At the court house steps, most properties sell for an average of 70% of their current market value. Most go unsold and enter the realm of REO or “Real Estate Owned” by the lender who issued the original loan. The main reason these properties never were purchased are because of the lack of knowledge in the Real Estate industry on how to secure financing to purchase them.
Hard Money or Private Lenders are the primary instrument for purchasing properties at foreclosure sales. There are two ways to secure these funds. The first is to leverage a personally owned property with equity in it before the sale, and use these funds to finance the deal. This is the easiest of the two methods for the investor. The second method, is more complex. The investor must find a Hard Money or Private Lender, inform them of their intentions, and get them to finance the majority of the purchase. MLM Leads . Below, I will provide a tried and true method of accomplishing this.
1.) Identify the property that you want to purchase at the sale. Day To Day Car Insurance . Comcast Rates . Ideally, this will be a property that was purchased many years ago and has a lot of equity remaining in it.
2.) Inspect the property and look for any type of damage that will increase your rehab expense.
3.) Do title work in advance so the lender is secure in knowing the property has no encumbrances.
4.) Do all insurance work in advance so the property can be insured within hours of the purchase.
5.) Have the property appraised weeks in advance so you can prove to the lender what it’s worth, what the LTV (Loan to Value) will be on the loan, and what your max bid on the property will be.
6.) Have all of the mortgage documents from the lender done in advance with just the loan amount omitted. This way, after the bidding has taken place, you can immediately go to the lenders place of business, sign the documents, pay for the title and homeowners insurance, and obtain the check to complete the sale at the courthouse.
7.) Complete your Rehab as soon as possible, refinance into a conventional loan, and reap the rewards of being a successful foreclosure investor!
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