supposed to find a HML before or after? sry for dumb Question lol

4 Replies

Okay guys, so I've been stuck in "analysis paralysis" for 2 years but im finally really to just go. So please excuse me if I ask a few stupid questions here over the next month :P 

So heres the question im stuck on. Am I supposed to have a hard money lender lined up before putting offers, or do I contact lenders after I get a deal accepted? on one hand I feel I should have the lender lined up to be prepared, on the other hand I'm thinking that a HML wouldn't "pre-approve" you if you dont have a deal for him to look at lol.

Any help would be much appreciated :) 

Congrats on starting to move forward!  It took me a year but I just closed on my first property today. 

I think you can do it either way.  You're going to get pre-approved  even if you don't have a deal ready. Kind of how a conventional under can pre-approve you without a deal and kind of give you a max amount they would loan you. Some deals require a letter of pre-approval for the offer to be accepted in the first place. I would go ahead and be talking to multiple lenders but don't shy away from conventional lenders for your first deal. I would give both hard money and conventional lenders a good look.

Make sure you put in the time to really research your lenders and to compare their rates and fees.

But, like you, I'm very new to this so hopefully some more experienced folks can chime in and either agree with me or tweak what I said to make a little bit more sense.

Either way, I wish you much luck friend!

Originally posted by @Jerry Fome :

Okay guys, so I've been stuck in "analysis paralysis" for 2 years but im finally really to just go. So please excuse me if I ask a few stupid questions here over the next month :P 

So heres the question im stuck on. Am I supposed to have a hard money lender lined up before putting offers, or do I contact lenders after I get a deal accepted? on one hand I feel I should have the lender lined up to be prepared, on the other hand I'm thinking that a HML wouldn't "pre-approve" you if you dont have a deal for him to look at lol.

Any help would be much appreciated :) 

Find your funding sources first. If you intend to invest in the lower mainland, you will find it to be very competitive right now and deals go quickly. If you are planning on investing in the States (I deal with this all the time with Canadian investors here in Arizona of which there are plenty) they overlook talking with their chartered accountant before determining the entity they chose to purchase under. An LLC here is treated as a Corp there and you are double taxed. Decide where you want to invest and the type of investor you want to be and then talk to someone with local knowledge.

@Jerry Fome   Talk to hard money lenders ahead of time. They should be able to give you a really good idea about how to make a deal work with them.

If you go into a deal knowing what numbers you need to hit, what documents you need to have, what your timelines are... you should be a lot stronger for it.

Has ANYONE ever talked to a hard money lender and had them say 'go pound sand until you have a deal?' I feel like they wouldn't get any business.

thanks for the replies everyone! very helpful, I guess I should start contacting lenders right away then. 

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