How do I secure funding before buying a foreclosure at auction?

Question

To buy a foreclosure at auction I need to have the full amount of cash within 24 hours of getting the house at auction (that’s after paying $20k at the auction). I’ll go to auctions with specific houses in mind that I’ve scouted beforehand, but I‘m confused on how I can secure the funds with a private money lender before I even know the purchase price of the house or even which of my pre-chosen houses I’ll get or WHEN I will even be successful at auction.

Eliott Elias · Answer

Get hard money on board well before you hit the auction, tell them which properties you are bidding on and how much cash to prep.

Frank Greg · Answer

Without cash you'll have problems buying at auctions.

Dylan M. Davis · Answer

Best to have your own cash and do a "delayed purchase" on the property as long as you know a lender that will take it.

Ned Carey · Answer

1) cash on hand

2) line of credit of some sort

3) relationship with a private lender that you know can and will act immediately. (Less than an ideal choice)

4) a hard money lender that you already have a well established relationship with and can confirm he or she will fund before the auction ( weak choice)

Any other type of loan that would require an application and approval is a no go. You risk losing your earnest money deposit or worse.

You buy from me at auction and I will keep your deposit without hesitation if you don’t perform. - I don’t say this to be harsh. I say it to prepare those who don’t understand the risk of auctions

Jared Hottle · Answer

Go to your local meetups and network. Local hard money is better because they understand the situation and hopefully you can work something out. Another possibility is partner with someone or get a home equity line of credit to pay cash.

Robin Simon · Answer

You will want to work with a hard money lender that can pre-qualify quickly and before hand and one that can do a confident valuation w/o an appraisal so you know your limits and terms going into auction

Chris Seveney · Answer

@Dallin Dragon

Very challenging as their are private lenders but they will typically lend x% of a price up to y%.

You will get charged a high rate as well as it’s being bought site unseen.

Best to have your own cash

How do I secure funding before buying a foreclosure at auction?

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