The need for speed
Sometimes a deal won’t wait - and to capture a good deal, you have to move quickly. Then it might make sense for a real estate investor to use hard money even if you could get conventional financing.
Here are a couple of examples:
- A bank-owned property (REO) where the selling bank will take your offer if you close before xx/xx/xx. Typically they are trying to get non-performing loans off their books, so 12/31/xx is sometimes a drop dead date
- A property you bought at auction - you have limited time to close, and financing is moving very slowly these days, if you have to wait for the lender, you could exceed the time limit.
- A deal where the seller is simply in a hurry - maybe to move to another area, sell a property to pay off the IRS, or maybe a court ordered payment because of divorce.
There are more reasons a seller could be in a hurry - my grandmother used to say “the hurrieder I go, the behinder, I get”. Well that applies to sellers too, and it can work in your best interest.
Once you have a loan commitment, a hard money deal can usually be closed as soon as we get clear title, just a matter of days.
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