Hard Money and then refinancing into a conventional loan

[Matthew Metros]

To preface - I am really a new investor.

From my understanding, if you want to purchase off-market, oftentimes you are dealing with wholesalers or people who need cash now.

Unfortunately, conventional and commercial loans are not an option, because of the processing times it takes to deliver the cash to wholesaler or owner who are looking for cash buyers/
Hard Money and then refinancing into a conventional loan seems to be the strategy to stay competitive with cash buyers.

What is the standard operating procedure to make this successful?

I would imagine that I would want to hold the hard money for as short as possible because of its higher rates. Then receive better financing terms on a commercial or conventional loan.

[Tony Angelos]

@Matthew Metros Often times you're right and @Dan Schweit gave an excellent explanation. This is not always the case though. You yourself can also search for off market properties in a number of ways: you can do it the same way that successful agents try and attract sellers by doing a mailing campaign to your target area indicating you're a buyer interested in their home; telling people your intentions is good too, as you may eventually tell someone who has a good piece of information for you. Just as hard money has it's place, so too does conventional financing. It just depends on your strategy and goals.