Investor · Las Vegas, NV · Member since 2020 · 12 posts · 0 votes
Has anyone had any issues with using hard money to buy investment properties? My husband and I are interested in buying out of state (Philadelphia) and we’re having a problem getting realtors to even present offers because they don’t recognize the hard money lender. They’re also questioning why we need hard money for such a small investment amount ($50-80k). We’re just starting out so that’s really our only option at the moment. Just curious if anyone else has encountered this problem and what you recommend. TIA
You mention agents - plural - why is it you haven't developed a relationship with a real estate agent who understands your goals and financial situation? Doing so will go a long way to making this process easier for you.
On the flipside, at those low-level numbers, I imagine a lot of your offers should be direct to the owners of the properties you are interested in. In which case, no agents need be involved - just get in touch with the sellers and have an attorney draw up a contract when you reach that stage.
You mention agents - plural - why is it you haven't developed a relationship with a real estate agent who understands your goals and financial situation? Doing so will go a long way to making this process easier for you.
On the flipside, at those low-level numbers, I imagine a lot of your offers should be direct to the owners of the properties you are interested in. In which case, no agents need be involved - just get in touch with the sellers and have an attorney draw up a contract when you reach that stage.
Tinton Falls, NJ · Member since 2020 · 108 posts · 85 votes
6y
Most hard money lenders won't want to go that low on loan amount. The other issue is they don't like investors that are geographically far from their property. They definitely would be very hesitant to lend to first time investors that are far from the property.
I'd very highly recommend choosing somewhere closer to home. If you're in Las Vegas, why not look there? Last I saw market outlook is pretty bullilsh there. You're going to make mistakes as a first time investor. Being able to jump in your car and get to the property to do what you can or get to city hall to put out fires is going to be integral. I ran a flip from the Jersey Shore in Philadelphia a few years ago and even after having experience behind me, there were some mistakes I made that made the 90 minute drive to the property an extra problem.
@Dillon Y. I think the plural Realtors may be the multiple listing agents. I've done a lot of acquisitions in Philadelphia and sellers will still get their property listed at very very low prices.
If your proof of funds isn't being taken seriously you may need to consider if you are using the right lender. If you'd like to message me I can give you some suggestions on HML in Philly.
Investor · Las Vegas, NV · Member since 2020 · 12 posts · 0 votes
6y
@Dillon Y. Thanks for the quick response! We have created a relationship with an agent who has submitted offers to SELLERS agents who are not recognizing the hard money lender and won’t submit our offers to the seller. Our agent gets what we’re trying to do, so she’s trying to figure out ways around it as well. Nevertheless, we are just wondering what others who may have encountered the same type of issues have done.
As far as going through the sellers without our agent...is it possible to deal with them without their representation? If they are actively listed, won’t they need to be responsible to their listing agent? We are also doing this from long distance...will that matter?
Real Estate Broker · Charlotte, NC · Member since 2016 · 569 posts · 351 votes
6y
@Theo Van Soest the listing agent has to inform the seller about any offer! it's not up to the agent to withhold any offers due to financing. If they withhold an offer its a violation against RE Law. I would recommend that you write a letter explaining hard money and if a listing agent still is unsatisfied contact directly his broker in charge over your realtor.
Specialist · Delran, NJ · Member since 2016 · 2k+ posts · 951 votes
6y
@Theo Van Soest is the lender you're using local to the Philly market? As mentioned above, your lender is fine with the loan size? It is a bit low for most lenders.