Making an Offer Using Private Money

[Vusa Dube]

If I am planning on using hard money or private money to fund the deal, how should the offer be written up? Is this written up as a cash offer or an offer with a contingency that needs to be put in specifically for obtaining a money partner/hard money lender approval? Do I need to provide some form of pre approval with the offer? The property listed on the MLS and is bank owned. If anyone has experience with purchasing MLS deals and using hard money / private money to fund the project, I am open to your input! I am using a RE agent to make the offer, and they have no experience with private money deals. Thanks!

[Jeff Cichocki]

Be careful when when making a cash offer. I've run into numerous situations where the realtor and/or title company has a heart attack when you try to switch to financing. They sometimes view it you being deceptive (it's not you - it's the other less than honest investors who screw this up for us). It doesn't happen all the time, but it happens more than people think.

When my business partner and I make an all cash offer, we also put somewhere in the offer that we reserve the right to use financing. However, we also state that our financing is not a contingency. This way, we are maintaining the legitimacy of the cash offer. We've found that it works really well and avoids a lot of heart ache and amendments down the road.

Good luck!