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The simple answer is “yes”, but in the real world, hard money lenders are more complicated. At first thought, it would sound simple to get a hard money loan and buy a property. However, the investor borrower must find a hard money lender who is willing to work with the investor based on his credit, funds available, the project itself, and a myriad of other issues. It's not uncommon for an investor to tell the seller that he's a cash buyer believing his hard money lender will be bringing cash to the closing. Cash to closing is [...]

The resistance to doing double closings is mostly because investors don't want to pay any closing costs.   Saving On Double Closing Costs In the assignment or sale of a contract, the amount of the Assignment Fee or Sales Price is a net profit to the investor. However, with a double closing, the investor may have to pay closing costs on the purchase and the sale of the property. I suggest if the investor’s profit is less than $10,000, he tries to assign his contract to save closing costs. However, if the seller, end-buyer, closing agent, state [...]

The most asked question I get is, “Do you fund the Earnest Money Deposit?” Funding Earnest Money Deposits Even if you are doing contract assignments, you may still have to put up an earnest money deposit with your original contract, depending on how savvy your seller is and how your contract reads. Of course, you'll have to put up an earnest money deposit if the contract you are signing requires one for the contract to be valid. The options for funding earnest money deposits are: Number one - Borrow the money from a friend or family member, [...]

The importance of dealing with investor-friendly closing agents cannot be understated! If you must deal with the domineering person at the closing agent or attorney, you could have a serious problem to start.   Too often, a closing person is knowledgeable from personal experience of doing a lot of closings but fails to get the investor deals closed.   The issue is a breakdown in communications between the closer and the investor because the closer believes the closing “steps” must be done in a certain way and the investor may not understand or agree with him.   This [...]

Real Estate Investors ask "Can I Be Sued if I Don't Close?" While anyone can sue anyone for any reason, the practicality of hiring an attorney and going to court stops people from doing this if they have an ounce of common sense. Let's look at what would really happen if you simply didn't close for any reason. If you use a “Standard” contract that your local Board of Realtor® uses, it limits your liability to the amount of your earnest money deposit. If you never give the closing agent your earnest money deposit, you should expect [...]

Too often an investor is faced with a serious dilemma if the end buyer's lender can't close timely, or close at all.  The end buyer's hard money lender should have gotten ready for the closing at least days or weeks in advance and, unfortunately, the end buyer may well believe this to be true. Many investors believe that having a hard money lender on their side to close means the deal will close timely. These investors too often tell the seller that they are “cash buyers” because hard money lenders bring cash to the closing, hopefully. Unfortunately, [...]

Transactional funding is sometimes referred to as transitional funding.   • This implies the property “transitions” from one owner to another over an indefinite time period. • While this is the process, transactional funding more precisely means that there are two distinct transactions - an A to B and B to C closing that occurred nearly simultaneously. • In most cases, the first closing takes place on the morning of the prescribed day of closing or the day before, and no funds are paid to the seller - this is called an “Escrow Closing”. • Later that [...]

It is possible to close at two different attorneys but there can be serious issues.   Usually, this two-different closing agent problem came about because the seller or the end-buyer stated that he wouldn't close except with his closing agent. If a Realtor® is involved, it's likely that this listing agent has a favorite closing agent that he likes to use - not that the seller picked this one. If the end-buyer picks the closing agent it’s likely has brought properties previously and knows what he's doing. That doesn't mean you can't get them to agree with [...]