@Lee Schram - apply with a HML and when approved you will get a pre approval letter to submit as POF. Cash offers go to the front of the line though. You will need some cash for down payment to have skin in the game. I have relationships with lenders that will fund 100% of purchase but that comes with time and trust.
Unless you're splitting the deal with an HML, you won't generally have proof of funds. Some online HML's will allegedly provide POF if you "register" (ie. pay a fee) with their company.
The contract goes in the name of the purchaser, the purchaser's LLC or other purchasing entity.
I interpreted your 1st question differently so hopefully between me and Guy we can answer what you are looking for.
1. A hard money lender is going to want to see that you have the liquidity to make the interest payments. So they are going to ask for proof of funds. This would be where ever the payments will be coming from i.e. bank account statement, line of credit, SDIRA, etc.
2. Whoever you want to be on title, whether that be you or a corp or llc.
@Lee Schram - apply with a HML and when approved you will get a pre approval letter to submit as POF. Cash offers go to the front of the line though. You will need some cash for down payment to have skin in the game. I have relationships with lenders that will fund 100% of purchase but that comes with time and trust.
Great Thread. We provide the proof of funds in the form of a letter from our lawyer that we have the capacity to enter a transaction. I do not like using a bank statement because it can be altered. We have had this happen. The attorney letter works great. Always purchase the properties in the name of a corporation or similar structure for your asset and liability protection.
If you're buying with a hard money loan, write the offer as financed, not cash. Cash means you have the cash to close. A hard money loan is still a loan.
Hard money lenders are highly varied in their guidelines. Most are small companies that match their terms to meet the local market. Some will go over 80% of the money you need if you have the right deal. Some require you to have some of your cash in the deal regardless of the numbers.
I have been doing some research on Hard Money Lending and have come across a couple of good books. Chapter 5 in Brandon Turner's book "The Book on Investing in Real Estate with No and Low Money Down" covers the topic pretty well. Another book that may be helpful is Lee J Carney's "Four Step Guide to Private Lending Profits". However, this one is from the perspective of the HML.
I believe you can get 100% financing of the sale price and rehab costs if you have a great deal and the numbers support it. Collateral is the name of the game
thanks Rob. I purchased and read Jay Scott's books on flipping. My next read will be Brandon Turners, "The Book on Investing in Real Estate with No and Low Money Down"