private lenders/hard money loans
I've never dealt with a private lender or hard money lender before. My question is, is it possible to obtain a private lender or hard money loan for the sole purpose of getting a deal to wholesale. Instead of trying to lock up the property under contract and assigning the deal over. Is it possible just to use the cash from a private or hard money lender to obtain the property and still wholesale it out? Still as a all cash deal? Granted there is points,interest,etc involved, but if its at a low enough price where everyone is satisfied would lenders loan cash for short, I guess very short term loans? Further more or is it possible to for the same scenario for a property that has tenants? And you use the monthly payments to pay on your loan until you wholesale the property. Again its just for a wholesale deal no rehab or nothing like that. Just looking for alternative ways to lock up deals. Thanks
Most Popular Reply
It's called transactional funding. There are several lenders that specialize in this type of funding. You buy the property with all of the lender's money (100% except for the earnest money it took you to tie up the deal) and then you sell the property to your cash buyer the next day for a profit. You repay the transactional funder, plus a couple points, from your cash buyer's funds, and you make the majority of the profit. The tough part is having a cash buyer ready to purchase from you a day or so after you buy the property. If you can make that work, I've actually seen someone make $115k in one day that way. Good luck!