Hard money loan for auction fix and flio
Member since 2025 · 1 post · 0 votes
Hard money loan for auction fix and flio
3 Replies
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes2mo
Quote from @Logan Hancock:
Has anyone ever done a hard money loan for a fix and flip on a property that is going to auction? This property has an ARV of roughly 280k and was foreclosed on. It was listed for a while on Zillow and never sold so it's getting ready for auction. This property has some roof damage and a leak but an inspection has confirmed that's really the only issue. It's one of the few auction properties that's also allowing tours inside the property. I want to do a fix and flip or potentially fix it up for my family since we're looking for a larger house anyway and was wondering if anyone has any experience with hard money loans for an auctioned property.
if it is going to auction and you want to get it at uaction yes you can get hard money, but most lenders will only go to a 50% of estimated auction purchase price to start and then once it is acquired may increase the amount and the amount to renovate it, but to get started you are going to need a significant portion of the money out of pocket as a lender is not going to take the risk since they have no idea what the interior looks like
7e investments53 Reviews - Lender · Washington DC · Member since 2026 · 74 posts · 19 votes2mo
Quote from @Logan Hancock:
Has anyone ever done a hard money loan for a fix and flip on a property that is going to auction? This property has an ARV of roughly 280k and was foreclosed on. It was listed for a while on Zillow and never sold so it's getting ready for auction. This property has some roof damage and a leak but an inspection has confirmed that's really the only issue. It's one of the few auction properties that's also allowing tours inside the property. I want to do a fix and flip or potentially fix it up for my family since we're looking for a larger house anyway and was wondering if anyone has any experience with hard money loans for an auctioned property.
Yes, absolutely! Investors take down auction properties using private capital and hard money all the time. Because you were able to tour the inside and confirm the roof leak is the main issue, you are in a much better position than 90 percent of auction buyers.
Here is the best way to structure this to make sure you win the bid:
- Bid as a Cash Buyer via Equity:
If you currently own a home with equity, taking out a fast digital HELOC gives you actual cash in your bank account before auction day. Walking in with cash allows you to bypass strict auction lender deadlines, avoid heavy hard money points, and close instantly. - Pre-Approved Private Funding:
If you use a lender for the purchase, you will want a Proof of Funds letter in hand before you bid so you can meet the auction house's tight deposit and closing requirements.
Whether you decide to flip it for a profit or fix it up as a larger home for your family, having your capital lined up prior to bidding is the key. What is your target max bid on the property?
- Bid as a Cash Buyer via Equity:
- Specialist · NJ · Member since 2022 · 1k+ posts · 653 votes2mo
Hard Money, no. Private money, yes.
The best way for this to work is bid on the house in cash. Let's say you win the bid at 100k. You pay for it and cash and when you get the deed you can now go to a lender and request a bridge loan. They will cash you out of the house 80% and supply the rehab.
If you want someone to fund you at the auction itself in real time, that is a private relationship that you need to curate. There is no institutional lender that I know that does it. They will put you in a bridge loan after the fact like I described but not in real time at auction. Auctions have no appraisals and no purchase contracts, and time sensitive payment needs. Hard Money takes 3 weeks or more.
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