How Did I Ever Get Started in My Home Foreclosures Investing - Part 4

After the walk-thru inspection and assessing how much repair work I have to do, I estimated that my repair cost for this foreclosed home will about $5000.00. The home repair cost is just about average. What I'm worried about is any unforeseen repair that I have missed. And sometimes those are the ones that really bites.

I called the realtor that I'm ready to make an offer for this property. This is a HUD property so there will be some strict guidelines to be followed in bidding for this property. You just can't have any realtor to do this transaction. A real estate broker registered with HUD may submit an offer and contract to purchase on your behalf. HUD pays the real estate broker's commission, if included in the contract.

I made an offer for $60,000 and due to close in 30 days. HUD will not provide you the financing so I wrote it down on my offer that I will be getting my own financing. There is also a set amount for the earnest money deposit for HUD homes. The rest of the paperwork was filled in by my real estate agent. The issue is if I have the money and hopefully get my offer/bid accepted by HUD.

After a couple days, I found out that my offer is accepted. I'm not sure if I have to start rejoicing about this since it's my first deal in home foreclosures. Now I have to find the money!

My main goal for this home foreclosures was to make quick money with it. Buy, fix it and then sell it. So I'm about half-way done with the buy it process. I need to get it officially mine.

The closing by the time I found out that my offer got accepted was already less than 30 days. Guess what I found out, I don't have any problem getting my loan approved by most lender. But the problem was it would take them at least 30 - 45 days to get my loan processed. I would lose the deal. And another challenge I discovered was the delay in getting it appraised. Any lender would require an appraisal, that's when I made my own discovery that lending institution will never really lose money.

I only had two weeks to go and I was still floating getting my financing approved. Then the lady helping me suggested that it would be better for me to go to hard money lender if I'm running out of time. She recommended to me an investor who's willing to lend me the money with the following terms. It's going to be interest only for 14%, minimum hold of six months and due in one year. And the down payment is $1,000 and he could process the loan in less than two weeks.

Since I'm running out of time, I decided to go for the deal with this investor. I know what I have to do with this property within 12 months so I was also optimistic about this whole deal.

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