What comes first...the deal or the financing?

Question

Matt Horwitz · Answer

BOTH. Don't let a lack of funding hold you back from hitting the streets and getting busy. If you find a good property and the right opportunity, you'll be so much more driven to hit those phones and make 20+ calls a day. You'll find the money. Now balance that out with making more casual/networking calls and talking to lenders. Bring a property that is on MLS/Zillow and make it a hypothetical to see what they're looking for. Learn both sides at the same time. All these "either/or thinking" is not helpful for us. Both! ;-)

Account Closed · Answer

There are so many lenders out there that it's almost impossible not to qualify somewhere! Sometimes the opportunity presents itself and you know you have a deal, so it's worth locking in the contract first then finding financing, knowing you have an exit route as a wholesale option if the numbers are there. Lendinghome offers short term financing for fix and flips, and the competition is everywhere these days. There are lenders that will lend to investors with a sub-499 FICO (Civic) and lenders with a minimum loan amount of $50,000 (Groundfloor) - there's truly a lender for everyone. Do your homework based on the type of property you're looking for, where you're looking for the property and know what you can and cannot get financing for before locking in a contract, but a pre-approval is not required in the investment space. As a lender, we do not offer pre-approvals since we underwrite the asset, not the borrower, therefore depending on the scenario you might not even be able to get one.

Bob Okenwa · Answer

Always find the funding first unless you plan to wholesale. Most buyers will not accept an offer without proof of funds anyways, and it'd be a waste of time to search for deals, find a great one, and then not be able to close on it.

Anthony Dadlani · Answer

@Tyler Brawn Always always get a capital partner first. A deal is useless unless you have the money to participate in it. Best of luck in all your endeavors.

George Smith · Answer

@David Goings hey I know this is an old post but I’m hoping you’re still an active member.

I’m down in Enterprise AL and found a bank owned house that would make a great Flip or BRRR. I don’t currently have the capital needed to buy in cash but know I could find the cash if it was under contract. I guess I’m asking how do I get the bank owned property under contract without proof of funds so I can then take the contract and get funding?

Tom Hurford · Answer

Hi Tyler-

You need to line up your funding "plan" so that you know the exact next steps to take when you find a great property. In many markets, good deals attract a lot of attention and go quickly. You have to be able to move quickly and in some cases close quickly. If you start your financing search after finding your property, you stand a good chance of losing it or not having your offer taken seriously.

Ryan Lee · Answer

Deal comes first...Always. Because a good deal can be wholesaled to an investor with cash...if you can't get it for yourself. Hit the streets and get with realtors who are hitting the streets.

David Goings · Answer

@Tyler Brawn I agree with @Bob Okenwa for this one. Proof of funds is important if flipping to even be considered as a serious buyer by the seller in most occasions.

Lastly, I am an active wholesaler here in Columbus GA. In box me so we can discuss real estate and get you plugged into the market here.

Regards,

- Dave

Jeffrey Hotz · Answer

If you are buying a home at the numbers, then the money is out there and will come easily.  Problem comes when investors push the ARV or under estimate the rehab and the lending companies don't agree with their valuation.

Its not 2010 anymore and now you can shop for lending program.

What comes first...the deal or the financing?

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