How does one arrange financing for buying foreclosed/pre-foreclosure properties that are being auctioned? I always assumed you needed cash on hand, but can they be bought with some kind of mortgage?
Most people buying use cash or hard money to buy them. You could only get financing if the home is in livable condition. Some auction sites will tell you they are only accepting cash offers.
@Kevin Reid the "hard Money" that Curt mentioned is a "Hard Money Lender" these are non traditional lenders that make high interest real estate loans to investors. These are generally intended to be short term loans of 1 year or less.
They tend to focus more on the deal and your experience than on our credit. There is a list of them here on the site under the resources tab.
In general buying at auction is not a good idea unless you have cash. Your deposit is always at risk if you cannot get financing.
Ive purchased 3 SFRs using hard money in the Houston market! Most require 30 days to close due to any title issues that may pop up! A good hard money lender, wont put you at risk this way, some will. Make sure this lender can pre-qualify you on the back end so that your're guaranteed permanent financing on the back end. Most auctions want the cash upfront so a private lender is the way to go on that route. Hard money may turn you down on the auction side cause most want good numbers to fit you in the deal which the auction houses don't/won't provide.
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