Hard Money Runaround?
I decided to go to Barnes and Noble today to see what they had on specific niches of REI and found a book on REO's called "How to Buy Bank-Owned Properties for Pennies on the Dollar" by Jeff Adams. I sat at a table by the bookshelf for about 3 hours reading it and I have to say, it opened my eyes to REO's. My goal this weekend was to find a book do just that. Throughout the book I jotted down a few questions to ask you guys and gals when I got home. Here is one:
Jeff talked about acquiring your money before the deal which is of corse a must and one strategy he suggested for beginning investors was through hard money lending which seems appealing to me because I'm a young investor with no prior deals and from what he says they judge based off of the deal and not the investor mostly. He explained the process of how it works and the process of going about finding and securing a committed hard money lender. All that makes sense. The part I'm confused on is when he said that, over the course of pages, in order for the bank who owns the property to take you seriously they'll only talk to you about a deal if you provide proof of funds; but the only way the HML will approve you and provide proof of funds is if you bring them a deal. Well you can't properly analyze and pitch the deal without all the information which the bank won't give you because you haven't offered proof of funds.
Perhaps not all hard money lenders will turn you away if you don't have a deal on hand.
Perhaps not all REO agents will turn you away if you don't have proof of funds on hand.
Just looking for someone who's familiar with the process to clarify.
Thanks.