One of my most common questions is "How do I work with hard money lenders?" or "How do I find good hard money lenders"?
This post gives great information about hard money lenders and I want to note my favorite way of finding them here.
Foreclosure auctions are my favorite way to find hard money lenders.
Let me explain. When most states hold a foreclosure auction they require those that are going to bid to pay cash, large or small amounts, at the auction and pay the rest in a few days. In may state I am required to pay the purchase within 24 hours.
24 hours is too short for any mortgage company. This means that I need to have cash to go to a foreclosure auction. If I am required to have cash so are the other people at the auction.
I want to know if the people at the auction will 1) be hard money lenders or 2) who they use to finance their real estate.
Here is how I do it:
I will walk up to a participant at the auction and introduce myself. I will then ask them if they would be willing to be a hard money lender to me. If they say yes – Great I found a hard money lender. If they say no I reply with this: "Well, sometimes I come across properties I cannot purchase and look to assign those properties. Do you purchase from assignments?" If they say yes I will ask for a business card.
I want the business card so I can go to the courthouse (county clerks, county recorders office) and look up the individuals name and business name to see who is lending them money. I will then contact their lender.
Keep in mind most people who act as hard money lenders want to lend money. They will probably love a call from you and now you have a good hard money lender and someone that will lend at an auction.
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