THE MILLION DOLLAR QUESTION--FUNDING
I recently purchased two new programs (new to me) BUYERS ON FIRE 2 and WHOLESALING MASTERY (a super spread sheet for purchasing HUD homes at http://www.hudhomestore.com/Home/Index.aspx). Now to purchase the homes at that site, you have to be a HUD AUTHORIZED realtor to put in the bids on the auction. And the realtor has to swear that he/she has seen “proof of funds” documentation from the customer for whom the realtor is bidding. In other words the realtor is selling the home on behalf of HUD to you and they are pledging that they know that you the bidder have the funds to buy the property at the price bided.
Now if you are in the investment business as I am and you don’t have a lot of personal money, the gurus tell you that you don’t need personal money; you can find all the funding you want in the private sector. However, the people who will loan you the money need the specific details on the property for which they are going to loan you money. So you can’t get the loan without controlling the property and you can’t get the property without the loan. It might all be different once you have numerous purchases and loans under your belt from the same lender, but getting that first funding is not easy, despite what they tell you. So if you don’t have personal money to put into the deals, you are going to have a heck of a time getting the funding without controlling the property first.
I assured the realtor that I had several sources for funding, which I believed I did. I went to one of the sites that I had been referred to and although they sent me a password to get into their “proof of funds” letter generator, the link has been shut down due to FREDDIE MAC policies. I am assuming that there was something about the site that did not meet FREDDIE MAC policy guidelines. So that source has been cut off.
I have several private lenders who have indicated that they can fund transactional (same day closings) or longer term (hard money), but they too want the details of the property that is already under contract. So how can I get it under contract without money? That is the million dollar question.