OfflineI have two investors with $100,000 each, but they do not want to own property. So I thought that I can use their money to buy foreclosures at auctions fore cash and then get a mortgage on the property, that way I own the property, they get their money back plus a profit and everyone is happy. Now the reality is that the bank will only lend on the contract amount, not on the appraised value of the home. So if I buy a $300,000 home for $200,000 the bank will only lend 80% of the $200,000. Anyone has any suggestions how I can make this amazing opportunity I have with this investors WORK.
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Have you considered a mortgage broker or checked into it? I am new to this but have heard of brokers doing things that banks can't. Hope this helps. Cindy
cindy REI
Have you considered an equity sharing agreement? Or -- is this what you are doing anyway? If you try equity share you will need an attorney to draw up the agreement, and might need to purchase the property in an LLC with the other two people being "silent" partners. When you sell the property, you then share in the proceeds (profit) from the sale based on your equity share agreement. Check with attorney in your state if this can be done there. Not all jurisdictions are the same.
80% of 200K would be $160,000 First Trust. Can you find a lender to do an 80/10/10 (if you have 10% to put down yourself), and 80/15/5 (5% of your own money, with a 15% second trust), or even an alternative financing lender who will do 100% financing (combined 1st & 2nd) and get the Seller to pay the closing costs (yours and his) on the deal. Or -- if your investors are willing to front a total of $200K -- then could they be your hard money source and you just do a short term loan with then, own the property, rehab it (as minimally as necessary) and then flip it for a profit. Just figure your rehab costs, your closing costs, your flip cost -- and be very conservative on how long it will take you to flip it since you've got to repay the hard money on short term. Check with a mortgage broker about doing a cash out once you own it -- if it will appraise for $300K for certain. What are your comps saying? Ask DG -- they're the experts here. I'm just trying to think creatively.
Texas Irish Lady
Texas Irish Lady
Hi lady,
The problem with your sugestion is that that is what caused the subprime trouble in the first place, so lenders do not whant to do that any more.
ARM171, what you searching for is a lender who doesn't have a "seasoning" period. They are out there. The real question is how long will they let you use their money? One year is the longest seasoning period I have heard of. Six months is what a lot of banks will use. But, there are some that will allow a refi as sonn as rehab is done and the house has been appraised by a bank approved appraiser.
What you have on your hands is a awesome opportunity. That type of opportunity is what most people dream of.
You've got to find your obstacles and call them out! Unsheath the sword, and do battle with whatever it is that holds you back!
Arm171,
I have programs that have NO seasoning requirements on NonOwner and Owner Occupied properties. I also have Lenders that will lend on 10+ properties. Let me know what state the property is in.
I am interested i learning more about these lenders I am in Illinois
The primary states I work in are CA, OR, WA, AZ, NV, and CO. Let me know what you're interested in and I'll see if I can help you in Illinois.
Do you have any names for the maryland area of no seasoning lenders?
Brenda Pugh
Hi sorry i came in late on this post but I am interested in the no seasoning. I have a great situation in AL. I can buy the property at foreclosure with a buyer who is already approved. But b/c of the loan that the 2nd buyer is approved for I would not be able to sell it to them b/c my loan would be less than 6 months old. This is a deal that only requires about 3k in repairs (paint, carpet, fixtures, and curb appeal.