But before the phone call is made, Investors need to:
- Act Quickly before the deal is sold to another investor.
- Ask questions about:
- Will the owner accept "No Money Down?" If not, what is the minimum down payment?
- Can the down payment be something other than cash?
- Will the owner hold paper? If so, up to what percentage?
- What are the monthly carrying charges? (Insurance, utilities...)
- Determine the properties Maximum Allowable Offer MAO so you can make an offer that is going to make you money quickly.
- Make sure you have multiple exit strategies.
Lenders are adverse to risk so here are some questions you should ask the funding entity:
- What states are they licensed to lend money?
- Will they fund the deal based on the After Repair Value ARV (good) or the contracted price on the Purchase Agreement (bad)?
- Will they fund the repair costs?
- Is there a Prepayment Penalty?
- How long can the investor borrow the money for?
- Up to what percentage will they fund? If your contracted price is $150K and they will only fund 70% what is the total amount that they will lend? Answer:$105K. That means you have to come up with $45K. OUCH!
- If needed, can the investor get more time?
- What are the repayment terms? Are these terms negotiable?
- Are there any Closing Costs, Points, Etc.?
- What are the Minimum and Maximum amounts I can borrow?
- Are there funds available 24/7 to take advantage of NEW investment opportunities?
- Hard Money (Quick but expensive)
- Private Money Lender (Best Option)
- Transactional Funding (Good for Short Sales)
Here is a list of lenders that you can work with. Web Links are below:
Bridge Loan for Multifamily Properties
Hard Money Lenders
Private Money Lenders
Transactional Funding (Good for Short Sales)
Related Links, Blog Postings, Presentations or Articles:
|Written by +Bob Burns.|
|I Love Fort Myers Beach!
Real Estate Investor
Telephone #: 305-586-5280
|Our Internet Footprint:|