How to use Private Money/Hard Money on a deal
So I have looked been looking all over the net for the answer to this, have watched 2 webinars, read countless articles, and they all say the same thing! If you have little or no money to use on your own, find private money! Ok, well I found it! Say my parents want to help me out after I showed them an amazing deal. Write me a check and let's get going right? Not so fast! According to my lenders that I have talked to, the money that is "gifted," needs to sit in your account for 60 days before Fannie Mae/Mac forget about caring for it. Sure if I had the money for 20%, they could just pay for the rehab costs, etc, but that is not the case! I do not have the full 20% that is needed but still want to push forward and purchase a property! So everyone says they keep investing using other people's money. HOW!? Please explain, because there is nowhere out there, that I have found over the last 2 weeks that explains it well. They always just say they use private money, hard money, etc if they find an amazing deal and need to act fast. Hopefully, I am not just missing something, but I am totally stumped on this one!
Thanks for the help!
P.S. - Can you also explain if you had a PML/HML for the full purchase price, which could happen in the future after forming relationships, how that would work as far as applying it to buying the house. Because I would assume you are running into the same issue? Or is it considered an all cash purchase at that point and it makes the process easier? Thanks!
Tim V.