Find a Deal 1st or Investor 1st?

Question

Hey guys, I've done lots of foundational work. I've found my market area, a couple agents, I'm analyzing deals and finding contractors.

It almost seems like I should get funding in place before I make an offer. True? So I've been calling HMLs trying to find one that meets my criteria.

Am I wise to get funding in place first?

I don't want to spin my wheels calling HMLs if I should be getting an offer together instead.

Stephen Patton · Answer

@Eric van Dalen If you have a home I would recommend go get a HELOC and use that for smaller buys depending on your deal size. On the HELOC you don't pay interest if you don't use the Credit Line, it give you the buffer as you line-up finance. It's like a large Credit Card.  For larger deals, you need to get pre-approved and best lock in your rates if you can. Get the Finance in place before you get the deal. Its like shopping with your Credit Card without knowing your Credit Limit or Interest Rate, so not adviced. You are on the right track.

Cassi Justiz · Answer

You are on the right track. A lot of HML won't give you a full go ahead on funding until you have a deal wrapped up and they can evaluate it. But if you can get those relationships established and know what their criteria is you are in a much better position once a deal does come up. It's a lot harder to start establishing relationships once you are in a time crunch.

Eric van Dalen · Answer

Perfect, thanks guys.

Adam Gollatz · Answer

You have to work all pieces of the puzzle at the same time when you start out, and you will never have the complete picture of any one piece until you pull the trigger.

Like @Cassi Justiz said, most HML can ballpark rates, but they may have lending tiers, so they cant finalize numbers until they see the numbers for a specific property. Same goes for contractors, they can ballpark material and labor prices by the sqft for flooring, paint, etc, but once work starts, its very likely things can come up. But dont let a little unknown deter you. You only need 90% of the pieces to be able to tell if a deal is truly a deal or not.

Find a Deal 1st or Investor 1st?

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