Orange County, CA · Member since 2019 · 10 posts · 4 votes
would you use hard money over conventional to have an advantage when competing in a hot market? I am certainly preapproved and have no issues with going with the traditional route. but with the market being very hot right now and everyone is fighting over decent deals, can I leverage HML and refinance it to a conventional one once I close? I am assuming the HML is seen as more attractive as cash offers and might give me a chance to close on a deal.
Hi Mena. I would say do not chase a deal and offer more just to get the deal and then the numbers don't work. With using HML, you need to factor in the points that comes with the loan and the added fees with draws during the rehab. All these cost add up to the actual total cost of a project, and could make the property bought not a deal.
IMO stick to making offers to where it makes sense, because you do not want to be in a deal if and when the bottom of this hot market falls.
If the people getting the deals are doing it with cash, then you may need to figure out how you can also make cash deals. As mentioned though, make sure the numbers work with the additional money costs...