Coordinating wholesalers, HML's, and inspectors?

Question

Just got off the phone with a Hard Money Lender (BridgeWell Capital), and they told me it usually takes them a couple business days to get their inspector out there. These wholesale deals have no inspection period, so once I sign the contract, I must go through with it, or lose my earnest money. They told me their basic guidelines, so should I just go by what they say and if by some chance I happen to be wrong, they I lost my earnest deposit?

As long as the house is 3/2 or more, over 900sf, and not a complete rehab like a fire or flood property, they said they would most likely lend on it.

So my only option is to "risk" my earnest money until I get to know my HML better?

As long as the house is 3/2 or more, over 900sf, and not a complete rehab like a fire or flood property, they said they would most likely lend on it.

So my only option is to "risk" my earnest money until I get to know my HML better?

James Green · Answer

@Patrick Philip, you need to connect with more HML in our area or even private lenders. Start with asking the wholesalers that you know, if they recommend any lenders.

Patrick Philip · Answer

But the wholesale deals go so fast that 2-3 days might be too long.

Nick C. · Answer

We have a lot of experience with these large institutional lenders. They may call themselves hard money, but they operate more like a bank. There's appraisals, sometimes inspections, outsourced underwriting, and the closing often gets delayed. Even when they approve a loan it doesn't necessarily mean it's going to go through.

The only thing they have in common with hard money lenders is high fees and interest rates. The process is very much like dealing with Wells Fargo or Bank of America.

BJ Everson · Answer

Can you tell your HML that you plan to submit your offer on the property 2-3 days from now so they can order their inspector?

Other risks is that you get your offer accepted but due to valuation by the HML they could say no and you now have a contract you need to execute with no financing in place. Or the HML might not provide enough for the rehab and you dont have the $$ to cover the rest yourself.