Where To Get The Money For The Auction?
It is extremely difficult to try to get in touch with these pre-foreclosure owners and we are wanting to buy at the auctions. We have been to two auctions already and we see some oppurtunities at our county(Collin County, TX). Since cash or cashier's checks are the only forms of payments, where can we get this type of money. Our credit is excellent but no traditional financing company will touch this....any ideas?
There are several ways to get the money. If credit is good enough use credit card debt. I have a hard money lender that will go to the austion with me and bring a check for the deal. Also you can get money on your homestead or there are finance companies that will loan on your personal assets. Go to the auction again ank get to know some of the buyers and they will share how they got their money also. A lot have partners that are just rich and looking for a quick buck to get richer. Hope i helped a bit
Ted Jr
You've got 3 options...
then investors will seek you out. You use your money to fix, theirs to buy, both or your to hold until sale. The fair split is 50/50...AND you sell them on the fact that their investment is...
#1 Get an equity line on whatever real property you own, get it in cashiers checks, take them out monday and return them by friday if not used, or take them out the night before T-Sale.
#2 Hard-Money lender. They are all around if you know where to look. They will look at Loan To Value Ratios (LTV) for EACH DEAL. If the deal makes sense you use thier flsh cash to purchase, and pay only the HIGH interest rates until resale, then you pay back the amount borrowed. You use your own nest ogg of $10K+ to do the fixing. HIGH INTEREST RATES.
#3 OPM (Other People's Money) but not Hard Money. Prove to investors that you can structure, find, buy, fix, and resell properties by providing reports. IF your reports speak for them selves (scream "PROFIT!"
"secured by REAL PROPERTY that's worth MORE than they bought it for the day you buy it." "Even if I can't fix it and get it sold you can quick sell it off to another investor who will do the rehab as a discount sale, and still make a profit, although smaller than having me glitz the property and sell it for full market value"
Hope this helps. -MakoShark
Thank you to both of you for replying....on hard money, where do I look? Will they dish out the cash before the sale? Besides the LTV criteria, what other criteria has to be met?
With the credit card option, the equity line of credit, and "Other People's Money", I can raise 100K, but the majority of properties that we have been encountering are going for around 150K and are worth in the 220K range? Would the hard money lender get involved for the remaining 50K to buy the property?
Absolutely! You're fronting MOST of the risk.
Use what you have (leave yourself enough for fixup, holding, resale allowance up to 3%, and cushion) and borrow the rest.
Seach this board for "Hard Money Loans" to learn more. Find a local REI club in your area, check the RE papers and ads as well. -MakoShark
Apex Predator of the Foreclosure Investing Ocean >...\..>>
Do not naively assume that your resales will go at market...you need to discount 20% below to move them, especially in this market...I know builders in Collin County who are now taking homes in trade as long as they are <$225k...too much product, too long on mkt, very thin margins...be very conservative, and buy your deals with a plan B...buy & hold for lease, if it works as a rental, then you'll be able make money when it resells.
Good point, you're better to call the action in that part of the country. Here in SoCal it's still Seller's Market and hot. The only slowdown is in the $500K-$880K range.