Find the Deal or Find the Funding?

Question

In your experience, which would you choose and which has had better success?

A) Finding a great deal first, locking it down, and then find the funding on the great deal.

Or...

B) Secure funding first, with general terms, then find a great deal to apply it to?

From what I've researched it sounds like find a deal and then show the deal to the lenders.

However I see alot of comments on how that's foolish and is a quick way to fall on your face.

Thoughts?

Lorenzo Wright · Answer

@Alexander Burkard

These two components dont have to happen in any particular order.

I do both at the same time. Why wouldn't you want to know what you are qualified to buy as you are looking at properties. Why wouldn't you want to know the terms of the private/hard money lenders you are going to work with?

Every deal is going to be different. A trashed property won't qualify for traditional lending, so automatically I start thinking about the hard lending.

If you find a deal reach out to who you would fund it with. Or call a HML and see what terms they usually offer, then when you find a deal run the numbers that they gave you.

Good luck!

Michael Heisterkamp · Answer

There is plenty of capital while there is a lack of deals.  The deal has more value.

Jesse Stahl · Answer

Kinda depends on what kind of loan you're going after. If it's hard money, I'd find the deal first, as they are much more likely to lend on a deal that makes sense for them.Conventional? I'd get pre-approved because it allows you to create better criteria for what you are searching for.

Odie Ayaga · Answer

Depends. This question tends to come up most often from people with little experience. What do you think is easier for a new investor: successfully identifying and finding a good deal THEN developing a network and securing a reputable lender in 30 days to close a deal or meeting people, finding reputable lenders and then finding a deal where they have people in place already who can tell them whether it's a deal or not? I've dealt with way too many clients who have found a "deal" only to realize they can't afford it because they think you don't need money to buy real estate.

Lorenzo Wright · Answer

I'm in Maryland. I just used a company called Hard Money Bankers. They are local and offered tons of insight and the closing was smooth and simple. I'd talk to a couple to compare the numbers and see who's a better fit. The BP marketplace has a bunch on there that you can call.

Alexander Burkard · Answer

@Lorenzo Wright Love the input! Thank you.Where do you go to find your HML's?

Find the Deal or Find the Funding?

Most Popular Reply