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Networking with Realtor's and Hard Money??
I was going to start networking with Realtor's and wanted to know if it is acceptable or more frowned upon to buy a deal through a Realtor with a hard money loan? I do have cash available but mite want to leverage some of it to do more than one deal at a time.
I understand everybody wants cash to close a transaction quickly but I was just curious about what others are doing out there with financing, and what some Realtor's think about hard money.
Originally posted by @Chris Gawlik:
I was going to start networking with Realtor's and wanted to know if it is acceptable or more frowned upon to buy a deal through a Realtor with a hard money loan? I do have cash available but mite want to leverage some of it to do more than one deal at a time.
I understand everybody wants cash to close a transaction quickly but I was just curious about what others are doing out there with financing, and what some Realtor's think about hard money.
Buy all cash the refit with a hml/pml. Cash is king, you'll better pricing and don't have to hassle with a loan contingency.
Let me try that again:
Buy all cash then refi with a hml/pml. Cash is king, you'll get better pricing and don't have to hassle with a loan contingency.
You can write the contract as cash, with an option for a hard money loan. A hard money lender can close within 2-3 days if needed. You should always try and include a contingency period regardless of loan or not. Ask for a 3-4 days, if you are working with a good lender, that should be plenty of time to get everything lined up. Usually escrow or the seller holds up the transaction a few days anyway.
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Using your own cash and then refinancing out using hard money is the easiest solution @Chris Gawlik. Even if you have the cash now though, with hard work and some luck, hopefully you'll have enough deals at one time that you run out of cash. (Hard/Private money is only for the short-term and generally suitable for deals like flips. Buy and holds require longer term, cheaper money. You weren't specific.)
Either way, the more aggressive agents, who are used to working with investors, understand the game. It's very common to make an all cash, non-contingent offer and let your agent explain to either the seller or their agent that you will likely close with hard money. These are discussions you have up front with your agent so they know how you work and also your intentions.
Once your offer is accepted, either they or your hml/pml broker, will also break the news to escrow, who normally don't care either. It rare that a private seller will balk, but sometimes a bank will. Even in the heyday of REO's it was rare, but you could usually do a back-to-back close through one escrow company or two. Ditto short sales.
All of this works best after you've done a few deals and have gotten to know and trust one another, but this is extremely common out here.
Here's a related thread.