How to write a hard money loan into a cash-equivalent offer purchase contract?

Question

Hi guys,

There's a on market sfh for sale, and the seller wants real cash offer. They rejected our verbal hard money loan offer.

My question is, how do I and my agent to write a purchase contract and absolutely transform a hard money loan into a cash-equivalent offer in the seller's eyes?

And I want to hear all you guys' thought about this whether it's ethical.

Thanks,
Kwok

Ned Carey · Answer

I think using the term "Cash" in a contract is stupid. Even with a loan the seller gets cash. The issue is, 'Is there a financing contingency" Simply put in an offer with no financing contingency. Where you get the money won't mater to most people.

If you need a financing contingency for the hard money make it very short or put up a large EMD.

Joe S. · Answer

Simply put in an offer with no financing contingency.

Simply do what Ned said right here.:)

Peter Mckernan · Answer

This is either an education to the seller or the agent repping the seller. Hard money is the same as cash if there are things that the HML will not do like they do on normal conventional loans etc. I.e. an appraisal, and having really a long loan contingency timeframe.

Couple things I would do...

1. Use a HML that does not do an appraisal

2. Use a HML that can do this deal within 3-10 days if need be

3. Use a HML that can even show funds in hand (bank account now)4. Have the HML lender call the agent/seller to tell them how they will close this deal quickly

Arman Ahmed · Answer

@Kwok Wong

Kwok, one way to make a hard money offer appear cash-equivalent is to structure the contract with proof of funds and clear, unconditional terms—like removing financing contingencies and shortening inspection periods—so the seller sees it as a “sure thing.” Some investors also use assignment clauses or bridge funds to show immediate availability of capital. Ethically, as long as you’re transparent with all parties and your agent, it’s acceptable; it’s really about presenting the offer in a way the seller trusts.

Jason Taken · Answer

I just shot a youtube video about this. You educate them on what hard money is - or you take the risk of them blowing the deal up once they find out you have a loan.

Nothing beats cash - and everyone knows it. So if there's a third party lender involved - some people just don't want to deal with that. Educate them on this.

Kwok Wong · Answer

Hey guys, I have been convincing my agent to present our hard money loan offers as a cash offers. But, she wants a bank account statement to show that we have the cash on hand. How can we overcome this?

How to write a hard money loan into a cash-equivalent offer purchase contract?

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