Rental Property Investor · Plumas Lake, CA · Member since 2019 · 18 posts · 2 votes
I found a couple properties that have been on the market for a while and would be perfect candidates for a BRRRR in my area at the right price. So I contacted my brother who is a RE agent and he said that he would be more than willing to submit any offers at whatever price I want all's he needs is proof of funds.
These would be my first offers on any investment properties and a lot of them are going to be at around 50% or lower of the actual asking price but I figured some offer is better than no offer because all of them need a lot of rehab.
So my questions are: How do I find a hard money lender? How does the process of making offers with HM go? Is there anything that I should specifically be looking out for? What do I need to do on my side of things to make everything go as smoothly as possible?
I would disagree that some offers are better than no offers when you’re talking about making offers with other agents on listed properties at 50% or lower of the asking price. That’s just a huge waste of time in my opinion (if not yours than certainly your brother’s).
Exactly zero homes in my area are closing at under 50% of their listed price (or anywhere remotely close to that), and making offers like that could earn you a reputation as someone who isn’t a serious buyer or doesn’t know what they’re doing.
If you want to try and pick up homes that far below market value, you should probably try and focus on off-market properties. Not ones that are listed with agents.
With off-market properties you also don’t generally have to worry about showing “proof of funds” as it’s usually agents (not sellers) who ask for that.
I would disagree that some offers are better than no offers when you’re talking about making offers with other agents on listed properties at 50% or lower of the asking price. That’s just a huge waste of time in my opinion (if not yours than certainly your brother’s).
Exactly zero homes in my area are closing at under 50% of their listed price (or anywhere remotely close to that), and making offers like that could earn you a reputation as someone who isn’t a serious buyer or doesn’t know what they’re doing.
If you want to try and pick up homes that far below market value, you should probably try and focus on off-market properties. Not ones that are listed with agents.
With off-market properties you also don’t generally have to worry about showing “proof of funds” as it’s usually agents (not sellers) who ask for that.
@Angel Garibay the first thing I would say regarding finding a hard money lender is figure out the minimum you are looking for as a starter. What LTV are you looking for? Are you looking for specific terms? That gives you a benchmark to evaluate lenders with. From that point, if you talk to someone knowledge about lending or a lender themselves they might give you some other thoughts to add to your list to "comparison shop" with.
There are some services out there which provide POF letters for a fee. I can't for which are trustworthy or credible, but there are some reputable ones. However a lot of agents or sellers won't accept these as they often show the $ in someone else's custody.
If you're working with hard money lenders already, some of them will be happy to provide a POF for free to try to win your business, assuming they like the deal of course. And they will often customize if for you specific needs. But be ready to make a compelling deal pitch before that's on the table.