Find Lending or Find Deal?

Question

Question:

Is it best to get a pre approval letter from a lender (hard/private/bank/etc.) before finding your rehab deal(s) or after?

I am one notch above a newbie in Houston, Texas. I know I have heard on the podcasts the statement "find the deal and the money will come" but now I have reviewed around 100 homes and I want to start placing some offers on them. Is now a good time to start finding lenders or should I wait until I place some offers?

Looking for some guidance!

Thanks,

Mike

Ryan Terwilliger · Answer

Stick with the same lender and after 3 or 4 deals they will see that you can repeat success and then you can usually get through the application very quickly, sometimes just make a call.

Harjeet Bhatti · Answer

Its always best practice to get pre-approval first so you can't miss any opportunity of bidding on homes. Specially now a days when inventory is low.

Scott F. · Answer

@Michael Pittman

We ALWAYS include a Proof of Funds letter from our bank with every offer and language in the offer something like this. We can close today,... this week... or as soon as you are ready,  so they know we're ready on our end.

Agustin C. · Answer

Completely agree with the gentlemen above. Make sure you have a plan in place, that includes financing. Most hard money/ private lenders will base their final decision based on the deal. If it is a good deal they will have no problem financing it.

Barry DeGroot · Answer

The ability to close quickly is always an incentive for the seller and often times, a necessity with distressed properties (i.e. tax sales, sheriff sales, foreclosures, etc.). And, good deals often attract more than one potential buyer. In my opinion, it would make sense to first line up a financing source and obtain either a pre-approval, or proof of funds (if establishing a line of credit). This way, the majority of underwriting on you (and/or your entity) is already behind you and the lender will only need to then evaluate and underwrite the property once located. Best of Luck!

Hung Trieu · Answer

Better find lender now , before the good deals come to you.

Michael Pittman · Answer

Thanks guys!

Awesome insight!

Find Lending or Find Deal?

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