Updated almost 5 years ago on . Most recent reply
what comes first, the chicken or the egg?
Hi! Wanna be investor here. I've been listening to tons of podcasts, reading books, lurking forums, trying to get myself pumped to start investing. I don't know if it's something that maybe depends on the situation, but I keep hearing conflicting information when it comes to financing, in terms of what comes first the deal, or the financing.
Do I find the deal, and then go find the money, or the other way? Does it depend on whether it's a traditional lender or a hard money lender?
thoughts?
Most Popular Reply
Kayla,
The reason you find the money first is to know you have secured the funds and at what cost. Traditional financing will have a lower rate and sometimes less fee's. The bank/lender will provide you an approval letter so that you can supply that to the seller/agent to show your qualified and at what amount. Private money can sometimes be faster but again is it worth the higher rate and sometimes other set backs >Prepayment penalty, Balloon payment, adjustable rate etc...
Hard money is generally the best way to go if you have good credit and income to qualify.