is it possible to fund a short sale that needs repairs with a hard money lender?
Yes, it is.
Great Jon thanks. Can you (or someone) give an approach on that? Because I'm concerned about the timeframe because it can take so long to close on one, I would think the lender would expect money before I even started to do repairs.Do people typically make an offer and wait for an acceptable on before they have funding lined up,that sounds like a disaster waiting to happen :-/
First, get the lender lined up. Get pre-approved, not just pre-qualified. Include their pre-approval with your offer.
Now wait and wait and wait for the lender who's getting shorted to approve the detail.
Once that happens, the HML will wire funds to the title company for the closing. You may have to bring some, too, depending on the deal and the HML's terms.
After closing, you may have to start making payments. Some lenders allow you to defer these until you sell or refi, some want them monthly. Typically the HML will hold back most or all of the rehab budget. You do the work and get it inspected by the HML and they will hand over the rehab budget in a series of draws. You'll need to work out with the HML the timing and amounts. Typically you must have the work completed to get the last increment.
Then when you sell or refi you pay back the HML.
Thank you so much for the info, you've given me a better idea on how to handle short sale. Thanks again
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