Have any of you had an experience getting cash at closing when using a hard money lender considering there is room in the deal and a properly structured contract?
Why in the world would you want to cash out from a Hard Money Lender? That's THE most expensive money you can borrow... You get the absolute minimum you can get away with getting from them, then, when you finish your rehab, you go to a conventional lender, and do your cash out then.
That makes good sense. My thought process was backward. I do have a buyer ready to purchase the property as soon as possible after I close so it makes no sense to borrow any more than necessary from the hard money man. Do you think my buyer will run into problems with his lender not wanting to finance a property that recently changed hands, or could I possibly arrange a simultaneous (or near simultaneous) close?
If it's a big mark up, or if you really haven't done much to the property, you may run into some issues, but if your buyer's got good credit, and you can get a good appraisal, I don't imagine you'll have too much of a problem.
Thank you for your input. It has been very helpful. The deal that I am refering to will be a significant mark-up (buying @ about 50% discount ($35K purchase price v.s. $70K appr value) with minimal repairs (maybe $2K-3K). Should I check with my buyers lender to see if this will fly?
Why in the world would you want to cash out from a Hard Money Lender? That's THE most expensive money you can borrow... You get the absolute minimum you can get away with getting from them, then, when you finish your rehab, you go to a conventional lender, and do your cash out then.
That makes good sense. My thought process was backward. I do have a buyer ready to purchase the property as soon as possible after I close so it makes no sense to borrow any more than necessary from the hard money man. Do you think my buyer will run into problems with his lender not wanting to finance a property that recently changed hands, or could I possibly arrange a simultaneous (or near simultaneous) close?
If it's a big mark up, or if you really haven't done much to the property, you may run into some issues, but if your buyer's got good credit, and you can get a good appraisal, I don't imagine you'll have too much of a problem.
jam200,
Thank you for your input. It has been very helpful. The deal that I am refering to will be a significant mark-up (buying @ about 50% discount ($35K purchase price v.s. $70K appr value) with minimal repairs (maybe $2K-3K). Should I check with my buyers lender to see if this will fly?