When using hard money, how should I draft the purchase offer?

[Hubert Chen]

I'm beginning to speak to a few hard money lenders for the first time, but they all kind of tell me something different when it comes to the best way to draft a purchase offer. What is the same is that they will give me a Letter of Credit as POF to the seller. I am wondering when buying a listed property, would I fill out the purchase agreement with simply All Cash, and show the letter of credit as POF if asked? Or would I check that buyer needs financing and will put down X% deposit + contingent on hard money loan? Also, a real estate agent says to write All Cash and with a mention that buyer may opt to use a non-contingent hard money loan.

Any advice? 

[Sean Blomquist]

@Hubert Chen a HML is NOT CASH. It works like cash in most cases, but you need to be up front with the seller and the title company about it being financing. It is not traditional in any way, but is still financing. Have your agent mark OTHER in the type of financing and write in either HARD MONEY or PRIVATE MONEY. That should work for the finance part of it. If you are putting any money down, you can put that as the % of purchase. It will depend on your HML and the % amount they will finance.

Good luck!