Investor Loans and Hard Money Lenders

[Demon S Rogers]

Hello everyone I have questions on investment loans, and hard money lenders. I'm working on getting my first investment and entertaining the possibility of auctions and foreclosure using hard money (private lender) to close the deal then refinancing out using traditional lending. Is this possible? Questions I have about private lending do they check your credit and run and application as an traditional lender would the only difference is they are using the assest as collateral? And would this show up on my credit report when I go to refinance.

In regards to investment loans is a 4 or 5% interest rate really that bad? I'm thinking about this lending strategy because I'm not sure if I want to have to live in a property for the first year like most loans require before renting out and I'm not sure if I want to lie about living there to get a better rate not sure if people do this or not. It might bring my cash flow down but I won't have to worry about someone finding out. If anybody has an investment loan if they could tell their experience with them that would be great... Thank anyone for answering , I'm unsure about taking the leap because I want to know more options available to me so I can make a informed decision for my situation.. Thank you all.

[Jay Hinrichs]

Originally posted by @Patrick Prunty:

In my experience, (Lucas County, OH, Montgomery County, TN and Christian County, KY) you won't be able to use a private lender to purchase at foreclosure auction.  The foreclosure auction requires cash, generally immediately/on the spot in the form of cashiers checks or wire transfer.  With this in mind, there is no escrow or period of time when the lender can do due diligence, review title work and help you get insurance in place.  You can buy at foreclosure auction and then, as soon as the trustee or sheriff deed is recorded, look to refinance and get your cash back.

Regarding private lenders, some check and report to credit while others do not.  All private lenders however take an application but just because an application is taken doesn't mean there is a credit reporting element.  All real estate  lenders, traditional or non-traditional use the asset as collateral and this is accomplished by recording lien against  (mortgage or trust deed) against the title of the property.  This makes the lien public record and thus everyone who cares to look at the title will know you have a loan against the property.

4-5% interest rates are historically amazing!  We are just spoiled right now/recently with 2-3%...the lower the rate the better but anytime you can lock up 4-5%, in my opinion, that is a deal!

I wondered what happened to Marshall he was/is a legend .