Start up capital hard money

5 Replies

I am in pa

How  does hard money loan exchange hands?

I  put 10% down

I get a receipt on my name 

they won't send a deed till 20 days after receiving full  payment 

how does the lender secure their loan

If I need the cash 20 days b4 I get the deed?

How do they know the value of the property to determine LTV let alone LTV after rehab?

I called a company and they said I have to buy the property first and then refinance it with them.

If I have funds to buy the property why do I need a  hard money loan?

Hey Daniel,

How does hard money loan exchange hands? - With a title company, an executed contract for the purchase and sale of real estate, and on the scheduled day of closing. That is simultaneously when everything is exchanged and managed by the title company.

 they won't send a deed till 20 days after receiving full payment - If an individual is offering this to you, it is a red flag. You must go through a title company and have an executed contract.

how does the lender secure their loan - Almost all hard money lenders secure their loan with a 1st lien on the property.  

If I need the cash 20 days b4 I get the deed? - If it takes 20 days to get the deed recorded with the county, that is a different thing. Title company should file with county within 3 days of the closing.

How do they know the value of the property to determine LTV let alone LTV after rehab? - Most lenders hire appraisal companies to have an appraiser give an accurate LTV and ARV based on construction plans and a walkthrough.

I called a company and they said I have to buy the property first and then refinance it with them. - Sounds like they don't do hard money then. Most hard money lenders are the opposite. They fund purchases, but not refinances. Mine does both.

If I have funds to buy the property why do I need a hard money loan? - Good question. Why do you? Are you looking for leverage to expand to more properties? Do you feel more comfortable in with seasoned professionals confirming what you are doing will end in profit to you? There are many reasons to use hard money, but if you don't have one, then you shouldn't use it. Using all cash is going to increase your overall profit, but at the cost of cash-on-cash return being much lower.

Thanks for replying Kerry

My situation is:

I am first time investor targeting the local sheriff sales in Allentown PA

My understanding is if I win an auction I go to the cashier and give her 10% with my I'd.

Then within 20 days the balance,

Then within 20 days I receive some type of deed not an actual deed this deed has to go thru titling but I can use it to evict and borrow.

So between the 10%down and the 20 day full payment I have to arrange finance with hardmoney

But as you say property has to be apraised 

It is that period that is confusing to me,  cause I don't actually own anything at that point how will they apraise it?

Can’t use HML in PA at Sheriff Sale because of deed issues.
I’ve literally had lunch with the head of deeds for PA, and it’s an issue.

You can email me for more info if you’d like

Originally posted by @David Weintraub :

Can't use HML in PA at Sheriff Sale because of deed issues.
I’ve literally had lunch with the head of deeds for PA, and it’s an issue.

@Daniel Souliotis This is correct. 

If you can fund the full purchase, I can get you your cash back out same day if the title company will issue a title policy for us. 

From Step 1: Put 10% down, go through loan application & underwriting with a lender that does this type of thing.

Step 2: If you can get an interior appraisal, you can get 75% of the as-is value. Otherwise, a roadside BPO gets you 65% of the purchase price.

Step 3: After underwriting we give you conditional approval letter, start scheduling closing for same date as your first closing (or, if title wouldn't issue a policy, as soon as deed is recorded in your name).

Step 4: You pay cash to close on your auction/sheriff sale.

Step 5: You get cash out plus rehab funds same day (if title will issue a policy). 

Step 6: Complete your rehab!


I am in Allentown next week Tuesday-Thursday. Give me a ring if you want to schedule a time to meet up.

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