Logistics of using private money as part of the cash to close

[Alexandra Scardo]

Next week I have a tentative closing date on my first flip! I have a hard money lender and I’m using private funds from family as the cash to close. How do I actually move that money around? Should I have my private lender transfer money directly into my own account? Should the money go from the private lender directly to the closing agent? I do know that the hard money lender will not be sourcing the funds. Thanks everyone.

[Alexandra Scardo]

Quote from @Stephanie Medellin:

If the hard money lender is not sourcing the funds, you could either have your family give you a certified check or wire to transfer the money to your account, or they could do either of those to send the money directly to the closing agent.  If they give you a bank check, make sure your bank won't put a hold on it for a week, pushing you past your closing date.  For that reason, a wire to your account or bringing it directly to closing might be the better choice.

If there's any chance you might keep the property and refinance it once it's remodeled, keep in mind delayed financing (within the first 6 months of ownership) will require you to source the funds used for the purchase.  A personal loan from family can be repaid, but a gift cannot.
  

 Thank you so much for taking the time to answer this question!