Since the bank seller and mortgage broker do not seem all that cooperative you may want to ask the bank if they would accept a contingency allowing you to have 5 to 10 business days to obtain financing approval.
You make your offer and if the bank approves it you take that to the mortgage broker and get your hard money.
Of course you have already made sure the property has met your criteria which will allow you to close easily. Call thoses brokers/hard money lenders back and ask them what they can loan you as far as loan to value ratio on rehab property before and after rehab.
If you develop a relationship with the lender as the person who is relieving them of their non-performing asssets they should become more cooperative in the future.
If you have a real estate investors club in your area go to the next meeting. There will be plenty of money there. It will be a big help to you to actually get to talk one on one with the hard money people. Once you meet face to face a lot of these barriers should come down.
I’m a NEWBIE on this wonderful site, who’s having problems
getting around the “proof of funds” requirement that almost
all banks are asking for to accompany all cash offers.
I attended a Ron LeGrand wholesale /retail bootcamp that suggested making “all cash” offers on bank owned properties (70% or lower) LTV minis repair. Once the offer is accepted either wholesale it to your local investors or arrange financing with a hard money lender to fix-up and retail.
The problem I’m having is showing the proof of funds to make an offer. I’ve called Ron LeGrand’s hotline for advice but his associates couldn’t help me. Every hard money lender I’ve contacted wants me to get the property under contract first and then call them for the funds. Are there any lenders out there who will allow me to show proof of funds if the deal meets all of their requirement? Or anyone out there with a better approach to doing wholsale/retails?
I have access to the MLS at home which allows me alot of time to locate some very good properties.
Any suggestions or advice would be greatly appreciated.
Thank you in advance.
Re: Need help with making offers on bank owned properties - Posted by Steve-Atl
Posted by Steve-Atl on February 22, 2000 at 08:12:46:
I faced the same thing when I started. Both the realtor and the lender want to know you can close the deal, especially when you make an all cash offer. That’s why they are asking for proof of funds.
I found a private hard money lender that wrote a letter saying I was pre-qualified for a loan up to $x depending on the specific property and terms of the deal. That seemed to satisfy most realtors and sellers.
Re: Need help with making offers on bank owned properties - Posted by Bill (OH)
Posted by Bill (OH) on February 22, 2000 at 08:08:50:
Why are you limiting yourself to cash deals on your contract? That’s where your problem is. Under ‘method of payment’ put ‘cash’, but under ‘terms’ put ‘subject to obtaining financing’…and whatever you need in the way of financing there. That way, if you can get cash–great! But the bank is not going to be looking for verification of funds.
Also, why aren’t you asking the bank to loan you 100% of the purchase price? Some of them will if your payment history and credit are good. For fix up, you could also use the HUD 203K program, which defers many of the holding costs and results in an assumable loan. Yes, it’s cumbersome with the paperwork, but if money is the problem its’ one solution. Just some ideas for you…
Re: Need help with making offers on bank owned properties - Posted by Bill K. - FL
Posted by Bill K. - FL on February 22, 2000 at 07:54:38:
Hi Chris,
Since you are new and short on $ but long on desire, why not try to partner up with another investor for your first several deals. You could locate them at a REI group meeting. There will be others there who have money but lack the knowledge and time to find the deals and put them together. Someone told me a long time ago, half a loaf is better than no loaf at all. If you think these bank deals are truly “deals” then don’t let a lack of $ on your part stop you.