How Can We Buy Houses Companies Close So Fast

How Can We Buy Houses Companies Close So Fast
Speaker 1:
Good morning. It’s Fan Mail Friday again with Rapid Home Deals. I am glad to see you on this video.

All right, the question we have from a seller this week is, “How can we buy houses companies close so fast?” Well, that’s a good question from our seller this week. Because we don’t do things the way ordinary people do them.

We buy houses companies, like Rapid Home Deals don’t rely on traditional finance bank lending to buy houses. We have a pool of private investors who have the cash and are willing to invest in houses that we purchase for very short periods of time. These loans are generally for one year as opposed to 30 years or 15 years through a bank loan. All right? They also have a very high interest rate, so the loans are generally 4 to 6 times what our lenders can get in the bond market and they’re at least 10 times more than what they could get if they put their money into a bank CD, a short-term bank CD. So it makes it very attractive for our lenders to lend us money.

Traditional banks only offer long term loans at lower interest rates and often require a lot more assurance that that loan’s going to be paid over the term of the loan and that the house could support the loan if things went south sometime over that long period. That’s why the normal turnaround time for a bank is about 45 days right now.

Then there’s another group of lenders that we buy houses companies like Rapid Home Deals uses, and these are called hard money lenders. They loan on the hard asset, the house itself, not on the borrower. They look at, basically, what is the house worth today as it sits, and then they will loan based on that. These loans are also short-term, generally one year, and they’re also very high interest rate. We usually pay around 15% to a hard money lender. That’s another source that we have for money to be able to close quickly.

This is how we buy houses companies have the ability to buy and close quickly. The lender has a choice. They can sell through an agent who is going to find someone who needs bank financing. Let’s say that they find somebody or get it under contract and then are able to sell it two weeks later. The seller is still looking at 60 days, at the minimum, from the time that they sign that listing agreement until they actually close. If the house is in good shape and it’s in good repair and it’s basically move-in ready and they can wait, then an agent is probably their best bet. But if they need to sell quicker because they’re facing foreclosure or they’ve got a divorce settlement that they need to deal with or if they want to sell quicker because they’re settling an estate, then we buy houses companies like Rapid Home Deals is probably their best bet because we can meet their need for speed. That’s the difference. That’s how we can afford to buy houses quickly and that’s also the benefit that we offer to sellers who are looking or need to sell their house quickly.

That’s it for this Friday and we’ll see you again on next Friday. See you then.
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