Make an offer or get pre-qualified?

Question

Which should be a priority, to get prequalified on the 20% or more downpayment on the investment property or make an offer to the seller and then get the financing? Also, when trying to get a loan, what documents should I have in hand so the process goes as smooth as possible? New to RE investing, and I have tons of questions. Thank you in advance!

Ken Lambert · Answer

Hello-
Keep in mind that a "pre-qualification" letter from any lender means less than the paper it is printed on.  Any decent realtor or seller will know that.  You need a "pre-approval" for it to matter.  A pre-approval means that the lender or broker has done more due diligence and has actually ran a couple numbers for your scenario to see if you qualify.

Big difference.
Thanks,
Ken

Tom C · Answer

Keep in mind that REO's and HUD's require proof of funds or the letter before they will even accept your bid.

Account Closed · Answer

Do both at the same time as you likely can easily do so.

You want to find out what financing options are open to you. It will change the deals you look for and the way you write your offers.

You do not want to wait for loan information before you start looking for deals. Deals you can not finance you may be able to sell on to someone else. Or you can find a partner if it is a deal worth your time.

John Corey