Successful real estate investors know they have to act fast when a good opportunity presents itself. But what happens when a bidding war comes with it? If you are forced to pay a higher price than you originally intended, the margin you hoped for will disappear. A hard money lender in Los Angeles can give you the edge you need to close the deal.
The Terms of a Bidding War
When multiple people place bids on a property, the selling party will look carefully at all aspects of the offers. More money is always going to attract the attention of a seller, but the terms are almost as important as the dollar amount a bidder has offered. That is why the highest bid is not always the one the seller wants to accept.
For example, a seller will typically consider a cash offer as the best deal on the table because it will close the fastest. Without contingencies and any need for the bank to get involved (other than for a funds transfer), the seller can be confident the deal will go through without a hitch. Cash offers usually take the top spot in any bidding war. But financing through a hard money lender is second.
Hard Money’s Edge
If there is no cash offer on the table, sellers will look at the remaining offers and, price not being a major factor, will usually settle on the one with the fastest close. This is where a hard money loan gives the investor the edge in the bidding war. The quick close associated with private financing makes this offer instantly more attractive than an offer backed by a bank loan. Sellers who want the assurance they will close tend to choose the hard money first.
Investors can gain an edge in bidding when they make their move with a hard money loan. For further information or questions about hard money loans and how we can help you please contact PB Financial Group at 323.935.5555 when you have your business plan ready to go.
PB Financial NMLS #357614/DRE #01522495