I recently came across an REO property that is weeks away from becoming live to bid on. It is in my families immediate area and would be a perfect duplex rental property (it would cash flow about $500 a month, and is decent condition). I have great inside intel on the interior and structural as I know one of the renters, and I know it would be rent ready immediately, and with a little more work, could be cash flowing $650 a month.
The listing agent says the place is Cash Only, As Is, but based upon its appraised value and what it was bought for in 2002, I believe a competitive offer would be about $80k. As I am young and do not have that kind of liquid savings, what would be the best way to proceed? A hard money lender with no financing contingencies? I'm afraid that when the bidding comes online, I will be beat out by other cash only investors.
Would another option be to pull together the competitive (say $80k) cash offer from family and then quickly refiance the place after it is cash-flowing to pull all that equity back out?
Thanks so much!
Most HML needs to see some experience before lending you $. Plus it is considered as financing, not cash.
Yes, you got the right idea. Look into private money from family and friends.
I would exhaust all your options if you truely think this is a good deal.
Yes HML's want experience but they also want to see a good deal. So if it is a good deal and you are a viable loan candidate they WILL lend you money.
Persoanlly I would first ask fmaily and friends for a loan because you could help make them some money on this deal too. At the same time though start getting your pre-approval from a Hard Money Lender in case. Attack this deal from multiple angles!
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