Re: Hard Money Lenders and flipping/wholesale??? - Posted by Sean
Posted by Sean on July 03, 2003 at 07:38:10:
Ok, here’s the general rule on HML’s. At least the ones I work with.
I work with 2 HML brokers, their rules are points up front and high interest rates. The Broker actually gets the points and the money partner (private money) makes the interest.
Now with that said, if you find a HML who does zero points, and buy and sell quickly you can theoretically do what you desire, and only pay them the interest for the time you are holding the property. PROVIDED there is no prepayment penalty in the HML loan.
I have used HML for very short periods in the past, and yes they will allow you to do it… but I am not sure personally why you are wanting to close on a quick flip.
Unless your seller is an institution (bank or corporation) all you should need to do is get the property under contract and then sell the contract to your end user for an assignment fee, or do a simultaneous close and you won’t need a HML at all.
Institutions are one of the only entities that can be sticklers about selling the property ONLY to the person the contract to sell is to. The only other issue could be the buyer you are selling to is getting a loan and may want your name in the chain of title, but even that can be handled by a simultaneous closing.
Best of luck