Moving toward Closing

Where I last left off, I've inspected, run the numbers, and I like the property. In addition, I've signed an assignment of contract, so it's mine!

Usually there is a couple of weeks between this point and closing. In that time, I have to get a few things done. The biggest this is arrange for the mortgage!

I advocate already having a source of money PRIOR TO finding a property. You should already be set up with a few hard money mortgage broker and lenders. It's not a hard process. They'll ask you questions, some might check your credit.

Where do you find these lenders? The best source is asking around other investors, wholesalers, etc. What surprised me when I first got into this is HOW MANY THERE ARE OUT THERE, in my area at least. And, they all work a little differently.

I recently got a call from a small bank loan officer I'd work with in the past. His bank was once quite active in investor bridge mortgages (quasi-hard money, I'd call it), but had quit doing them 6-8 months agao. Well, they wanted get back into that business in a limited way. He offered me a loan for cheap on my next project. Apparently they liked the way I operated and wanted to do business with them again.

So, I called this loan officer up and he agreed to give me the mortgage (after approval from their loan committee). That was a pleasant surprise. The hard money I was expecting to use was going to cost 4 points and 14%!

Let me translate. 4 points is what it costs to borrow the money (call it a broker fee, other fees, commission whatever). 14% is the interest rate. I know...ouch! These lenders are expensive, but they incur a fair bit of risk. They don't want the house, and investors are traditionally a risky loan.

...tomorrow more on the other minutia required before closing.