Do hard money lenders pay for the wholesaler fee?

[Armand Arellano]

Will hard money lenders pay the wholesale finder fee? Also would traditional financing pay that fee?

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Originally posted by @Armand Arellano:

Will hard money lenders pay the wholesale finder fee? Also would traditional financing pay that fee?

 Hard money or traditional lenders will lend based on "some percentage" of the value of the property. Traditional lenders (I was once a traditional lender) will lend based on the lesser of the selling price or the appraised value. 

That means if a traditional lender is lending 80% LTV on a $200,000 house they will lend $160,000 of the purchase price unless the appraisal comes in lower. If the appraisal comes in low, say at $180,000 they will lend 80% of $180,000 & they will lend $144,000 regardless of what your offer is above that appraisal amount.

If the appraisal comes in at $220,000 no, they won't lend 80% on $220,000 if your purchase price is $200,000. They will lend 80% of your purchase price of $200,000. 

Hard money lenders are free to do whatever they want but my past experience is that they do their own appraisals (walk through) and undervalue properties and lend 65% to 75% of their undervalued appraisal.

I don't make he rules, I just know what the rules are. Hope that helps.

So, the answer turns out to be . . .  it's unlikely the numbers will work in your favor for that to be done.