The best real estate investors understand you increase your chances for financial reward when you lower your risks in a property.
But how do you lower risks? One tip all property investors, fix and flippers and home rehabbers can use to decrease risks in property investing is to always have financing in place before walking a property.
Lower Risks With Financing in Place Before Walking a Property
By knowing your financing numbers and options early, you gain a full understanding of what types of investment properties work best for you and your overall property investing goals. This can help you avoid risks that aren’t worth taking.
4 Reasons to Get Financing Early in Real Estate Investing
- For Your Own Well-Being. You want to have financing and an execution plan in place to ensure this is a good investment for you and your investment portfolio. Not only is it smart business, it also gives you a sense of confidence when you walk a property and are ready to make an offer.
- Wholesale Deals. Many real estate investors and rehabbers look to wholesalers for available properties as this saves time in searching and negotiating deals with various homeowners and/or realtors. Also, wholesalers often find the best opportunities due to their experience and industry connections. However, wholesalers typically require a preapproval letter showing your financing is in place before they will negotiate with you.
- Show Them You’re Serious. By having an earnest money cashier’s check in hand when you look at a potential fix and flip home or rehab project, you are showing them you are serious. This provides additional incentive to the seller as they know you are a serious buyer who has the funding to back an offer.
- Timeliness. Wholesalers may have a limited time to sell a property, or sellers with a home in disrepair may be looking to close a deal as quickly as possible. If this is the case, you may not have time to get pre-approved and another buyer with financing in hand may swipe the deal from under you. Also, if a seller has two offers -- one with financing in hand and the other without, he lowers his own risks by accepting the offer of the financed buyer ready to close on the property.
At Catalyst Funding, our hard money loans are designed to be quick and simple, specifically for real estate and property investors. After filling out our pre-approval application online, you can have approval within 24-48 hours with a detailed estimate of fees.
For more information, contact Catalyst Funding online or call us at (832) 648-3626.