My company bids at the foreclosure auction on behalf of our clients, and also provides hard money loans to allow those investors with winning bids to pay for those properties within the required time frame.
In Arizona, a winning bid must pay an immediate $10,000 deposit, and pay the full remainder by 5pm the next business day.
Obviously, this doesn’t allow nearly enough time for obtaining a conventional mortgage, so hard money lenders can provide the required cash in one day to allow the investor the ability to buy and control the property. If there were no hard money lenders, then buying foreclosed properties at the auction would be a game only wealthy people could afford to play.
Hard money allows an open playing field. It allows the average investor to obtain properties just as easily as investors with tons of cash.
But here is the interesting part. Even people who have the cash to buy the property in full still use hard money loans, especially ‘fix and flip’ investors.
They pay monthly interest only on a short term loan for the length of time it takes to fix and sell the property. It is just an expense they figure in to the cost of flipping the property.
The fix and hold investor uses the hard money to obtain the property, and then applies for conventional financing. If the conventional loan takes a couple of months to close, then they only use the hard money for that period of time.
Do you know how to source and use hard money for your investor clients? To find out more, visit www.TitanCapitalHoldings.com
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