Filling the gaps when you run short of cash - by Cameron Dunlap

If you have ever had a red-hot deal in your hands, and had your financing all lined up, but the money you were able to borrow fell just short of everything you needed, then you know how much that hurts. If this hasn't happened to you then, good. And I hope to help you never let it happen.

It's not uncommon for a hard money lender to lend you 65% of the after repair value on a deal and either because of the first repair escrow draw coming after work must be done or running short at the end of the repairs you run short of cash. This can be a scary problem when your paycheck is so close, yet so far.

Or perhaps you are using a partner to fund a deal and they don't quite have all the money but you want to work with them.

Another way this can happen is when you take the deed subject to and because of back payment(s) or a few minor repairs (at most) you need a little cash to make the deal work.

Suffice it to say that if you are short by a measly couple thousand dollars on a deal, and just don't have it, that problem can seem like trying to bridge the Grand Canyon. And if you loose the deal because of it. oh will you be kicking yourself.

Well what do you do? The simplest solution is a cash advance on a credit card. But most of us are not working the system and look at this kind of money as expensive to use. Let me tell you it's some of the cheapest money you have available to you. Just be sure you call you credit card bank when you want a cash advance and ask if you have them directly deposit it into your account if they will waive the cash advance fee and charge you a lower rate. 95% of the time they will. If you write one of those access checks they send you in the mail, your will pay fees and high rates. This is what they want you to do. Instead you call and ask the question above because it will save you a ton of money.. Also if you are carrying a balance on any card(s) call them immediately and ask for the retention department. Tell them you are considering paying off this line of credit with another line offering an extremely low rate of interest and you want to know if they want to keep your business. Watch what happens. I got an email today from a student telling me he called his bank and asked, and they cut his interest rate in half instantly.

You owe it to yourself to work the system.

But wait. What if you need more cash than you have available on your credit cards? What else can you do? You have several choices. One is to seek a personal loan from one of the many companies that offer these type of loans. A few examples are Beneficial, Conseco, American General Financial Services, Household Direct, and lots more. What you will find is that if you have decent credit they will lend you 10 to 20k just on your signature and they are fast. If you have less than decent credit, personal property may be required as collateral in order to qualify. And this is not limited to real estate.

Many students use these loans and that way are in a position to do more deals and to move more quickly on them. This means more profit. Please do remember this though. You CAN NOT tie this money up long term. To do so would be risky and would limit your liquidity and you know that CASH IS KING!! Put it in the deal and then take it right back out or don't put it in the deal to begin with. This is vitally important for you to understand. This rule applies to all your lines of credit, home equity and cash on hand.

There are a number of sources for these personal loans and to make it easy I have posted a list of 7 of them with links to their web sites at CameronDirect.com With most you can apply on line. Go to the links page and the click the link for personal loans. Thanks to Becky Sanders for helping with this.