I found a home from a wholesaler and I want to purchase it. It needs to close on the 29th, but there is the likely hood I can get an extension of a few days if absolutely necessary.
The rub is, all of the supposed HML I've talked to say its going to be difficult to close that fast. I thought closing fast was one of the main selling points for HML. If I'm going to pay the higher interest and points for a loan that will take the normal amount of time to get, what's the point? Where is the value for me?
Anyways, I'm in Dallas, Texas. Does anyone have any suggestions on who to use that can close quickly and is still reasonable? It will be a quick rehab.
@Andrew Smith it depends on the type of HML they are going to give you. HML can close fast, but if they are getting an appraisal done, that adds some time to the process. Closing by the 29th would be tough in that case.
HML do close much faster than a conventional loan, but typically not as fast as cash, unless they are doing a lower loan to value. In that case they may not need an appraisal which would speed up the process.
The reasons investors use HML are:
1. Less of your own money into the deal, especially if it is a good deal and they are willing to cover 100% of your acquisition costs (purch, repairs, closing) as long as it is under their LTV of the ARV.
2. Many lenders won't lend on properties that are uninhabitable, but a HML will lend on most property as long as your rehab takes care of any issues.
3. Depending on the lender, they may not have a prepayment penalty. If you can rehab it as quickly as possible and get it sold, you may only have to pay interest for the time you used the funds.
We don't lend in TX, but I'm sure you can find someone that can help you out with this deal. The clock is ticking though, so you need to find someone no later than tomorrow I would think.
@Andrew Smith You need to find a HML that will lend to you without an appraisal or does an in house appraisal. That might be hard to find if you have not done a deal before or have not worked with a hard money lender before. Im sure they are out there though just need to start calling, easier said than done.
I've used LendingOne and they were excellent and great to work with. Closed in 7 days with appraisal for a fix and flip loan. Granted, I lived on my phone and email during those 7 days to make sure I could respond to their questions/requirements instantly. Every deal is different so yours may not close that fast but they are worth looking into.
I do HML and can close most deals in a week. Sorry, I don't lend out of state, but there are plenty of others that are as fast.
Hello Andrew. We close in 3-5 business days in Dallas. PM me to discuss. Thx.
Everyone, thank y'all for your quick replies. It looks like this post actually did the work for me and it seems as though Jon S. from Longhorn Investments took the bull by the horns (see what I did there?), contacted me and got everything rolling.
Again, thank y'all.
It can be done but it's tough.
We closed a loan in state but we knew all the actors. Appraisal ordered on a Friday, in our hands Tuesday, closed Friday.
Crushed the office but got done.
Borrower had a relationship and deal was too good to pass.
Generally? No chance.
Get HML to give a POF letter and have seller speak to them directly. Buy time.