Philadelphia, PA · Member since 2016 · 39 posts · 10 votes
Hey guys! So recently, I haven't had much luck stalking Trulia, Red Fin, Zillow, and all that for deals. I've probably seen every listing in the Fishtown/Kensington/Port Richmond area of Philadelphia a billion times.
I was wondering, if I were to start looking for off-market deals, do these deals sometimes allow for mortgages, or is it usually cash only?
99% of the time most off-market deals are all done with either cash or hard money. Depending on the condition of the home, the type of loan you are approved for and the person selling the deal may allow for it but it's rare to find. In the last 3 years, I've only allowed 2 people to use a loan when selling an Off-Market property.
Depends on your source, if it's in bad shape (think wholesale/distressed property) then probably cash only. If it's a pocket listing w/ a realtor then you might be able to get a loan, off market basically works the same as anything else it's just less advertised.
@Nina Ricci if you are asking if the deals sometimes allow someone to bring an offer with financing, the answer is yes. Many off market deals will restrict the offer, however some do not. Matt makes a great point above and it is also important to consider that there are varying degrees of what the words "off market mean". In this morning's inbox were ten emails from drip campaigns of wholesalers, agents, and other firms for "off market properties". Yes, those deals are not on the MLS. No those deals are not that exclusive because of the number of people that are viewing them. What is important to think about as well is that running the numbers is always important. It looks like you are well versed in doing so. Some "off market" deals are listed higher than we would list them for retail.
99% of the time most off-market deals are all done with either cash or hard money. Depending on the condition of the home, the type of loan you are approved for and the person selling the deal may allow for it but it's rare to find. In the last 3 years, I've only allowed 2 people to use a loan when selling an Off-Market property.
@Nina Ricci 1 of those deals was going to someone I knew so I was ok with that, and the 2nd deal I had a very hard time finding a buyer for and so it was my last resort to accept an offer with a loan. The person was already pre-approved and the process was fairly quicker than usual so I accepted the offer.
Cash and quick closes are what is preferred when it comes to off-market deals. Most of our deals don't last 24 hours before they are sold.
@Nina Ricci The other problem that comes into play is the assignment money due. Lenders are most likely not going to use that as part of the mortgageable amount. So you will need enough cash to close the deal and also pay the assignment fee, in addition to competing with cash buyers.