Newbie question: Do Driving for Dollars and Conventional Loans mix?

[Andrew Owen]

Hi All, maybe a dumb question: Looking at a potential flip and wondering if anyone combines driving for dollars/off-market with conventional loans? All the book examples out there seem to only point to making cash offers on deals found this way.

I realize that if it's too distressed, a bank won't lend on it and other financing will be necessary (hard money, partnership, private lenders, etc). But hypothetically, let's say it's not distressed and I want to go conventional. What's the best course of action here? Lock the seller up on a contract and then take it to a bank? 

Appreciate any tips; thanks in advance!

[Bob P.]

Quote from @Andrew Owen:

Hi All, maybe a dumb question: Looking at a potential flip and wondering if anyone combines driving for dollars/off-market with conventional loans? All the book examples out there seem to only point to making cash offers on deals found this way.

I realize that if it's too distressed, a bank won't lend on it and other financing will be necessary (hard money, partnership, private lenders, etc). But hypothetically, let's say it's not distressed and I want to go conventional. What's the best course of action here? Lock the seller up on a contract and then take it to a bank? 

Appreciate any tips; thanks in advance!

There is no problem buying off market and getting financing. That is all that I do.

You have a purchase and sale agreement with the seller, negotiate price, submit it to an escrow company and they do all of the work. Talk to a local mortgage broker about what their requirements are. They are more flexible than a bank.

[Andrew Owen]

Thanks Bob!

[Jacob Sherman]

Is this for investment ? 

[Bill J Fay]

Usually, the best deals need the most work. The deals that need the most work won't be approved for conventional financing. You can absolutely purchase off market properties and get conventional financing if it's eligible. Most investors driving for dollars target deferred maintained properties though.

[Kevin Sobilo]

@Andrew Owen, if you are going to put the effort into bird dogging deals like that you want to have the tools in your back pocket to take down any opportunities you find!

Many houses with obvious distress are not going to qualify for conventional financing. So, if they are not in your "buy box", you want to find another strategy to capitalize on them. I'm a real estate agent, so I could list them. You might wholesale them, or refer them to a wholesaler for a cut of the deal if it closes.