$54,000 AND $95,000 - Posted by GREEKVESTOR

import · October 25, 1998, 1:58am

Posted by Jennifer(NH) on October 26, 1998 at 09:35:39:

If the GreekInvestor lives there he shouldn’t have any problems doing an unseasoned refinance, if its non owneroccupied there could be a problem.

import · October 25, 1998, 1:58am

Posted by GREEKVESTOR on October 25, 1998 at 01:58:55:

LET ME FIRST THANK ALL RE WIZES BEFOREHAND IN ANTICIPATION TO YOUR CREATIVE SOLUTIONS!

SO, TTTHHHAAANNNKKKSSSSSSSSSSS!!!

Case details:

In 6 days I will close on a 1FAM. I will buy for $54,000 with 10% down [$5,400], at 6.75%, at 0 points. I estimated total cash at the closing appr. $10,000.

3 days ago the lender told me that they just appraised the subject “as is”, [the house is a mess because it is a FANNIE foreclosure, and needs serious TLC], for

WWWWOOOOOOOOWWWWWWWW! appraised for $95,000.

According to this info, I’ll be sitting confortably on house that’s worth almost double the amount I bought for!

My plan:

I like the house and would like to keep and enjoy for my kids and wife.
I like to do an instant REFI for “cash-out”. But first, being also a contractor, I’ll refurbish the property to raise its value over $100,000.
My question is: what’s the best way to get a lot of cash out? REFI right away? or get a home equity loan?or what type of a REFI? are there other choices?

PLEASE HELP! EVEN THOUGH THE GREEKVESTOR IS STARTING TO GET HEAVILY INTO RE INVESTMENTS, HE IS STILL A NEWBIE!

import · October 26, 1998, 10:23am

Re: $54,000 AND $95,000 - Posted by rob day (NH)

Posted by rob day (NH) on October 26, 1998 at 11:23:02:

Greek,

SO sorry I misinterpretted your desire, Jenniferis 100% correct, if you want to live there then you can re-fi right away. Thought it was an investment property.

Sorry,

Thanks,

Rob

import · October 26, 1998, 5:44am

Re: $54,000 AND $95,000 - Posted by Rob Day (NH)

Posted by Rob Day (NH) on October 26, 1998 at 06:44:22:

Greek

I don’t know where you live, but in my area and I have also checked many nationwide lenders, you will not get
immediate refinancing because your loan is not seasoned. You’ll have to wait at least 1 year, at least that is what everyone is telling me. The South Pacific thing really screwed things up. You may want to try a hard money lender, you may be able to pull a little out or try one of your contracting friends. If anyone else can add to this I would be more than willing to take advice as well. Greek if you do find someone to do it then please let me know as I would be forever greatful, it looks like I am going to take a second on my house to do my deal. Let me know how it works out for you.

Thanks,

Rob Day (NH)

import · October 26, 1998, 12:25pm

Re: $54,000 AND $95,000 - Posted by GREEKVESTOR

Posted by GREEKVESTOR on October 26, 1998 at 13:25:49:

Hey guys listen to this:

The subject is my second home not an investment property. Because it appraised almost double the purchase price, I will REFI immediately!
I already spoke to a lender for a REFI. After all REFI loan costs deffered, I will end up owning the house and still have about $15,000 in cash. That money then will be used to buy the next property and repeat the same process all over again. You follow me?
House after house, I will use the equity to borrow against, and buy more. Eventually, what it comes down to is “no money down”. Well, then you may ask me: if you don’t put down your money to buy, who’s money is it anyway?
It’s simple: it’s the lender’s money I will be using for the purchases, by using existing equity on such houses.

Let me lay it out in real numbers:

Purchase 1st property at $54,000
Lender approved for $95,000 “as is”
Buying this Friday at 10AM, and paying total cash up-front about $10,000. My mortgage will be $48,600 at 30 yrs. at 0 points at 6.75% fixed rate.
Today another lender told me that he can give me a REFI loan right away for a 70% LTV of the appraised $95,000 home value.
70% of $95,000 is $66,500. This amount will be loaned to me at 7% interest at 30 yrs. at 0 points.[I told the lender it’s my second home].
At the REFI table, my loan of $66,500 will pay-up my 1st mortgage of $48,600, I will end-up with $17,900.
The lender will also charge me a total expenses flat fee of $1,300 for the REFI loan costs. $17,900 minus 1,300 is $16,600. Then I will pay the title company about $400. $16,600 minus $400 is $16,200.
When all the smoke clears out of the table, I will end-up still owning the home, and I will put about $16,200 in my pocket.
The beauty of this deal is that my second floor tenant’s monthly rent will pay for the home’s monthly expenses, and I will still use the first floor for me!
I have a choice with what to do with the $16,200. I think I will find a similar property in the same community and start “carbon-copying” all over again the first deal!

import · October 26, 1998, 10:34am

Re: $54,000 AND $95,000 - Posted by Ed Garcia

Posted by Ed Garcia on October 26, 1998 at 11:34:51:

Rob:
Southern Pacific?s problem has not caused a problem in the market place.
First Plus has shook up the 125% LTV market and as you can see those
loans are not as available as they once were.

When we lost Southern Pacific, we lost a good lender for a refi on NOOs.
Southern Pacific did not make bad loans as suggested.
What Southern Pacific did do is send a message to other lenders who
securitize their loans, and sell them to wall street.

Southern Pacific lost their major credit lines and could not find another
conduit to sell to, and the rest is history.

As for me, I sold loans to Southern Pacific, but them being gone is just
another day at the office. You can?t put yourself in a position to let any
one lender control or hinder your deal. you always should have a plan (B).

There are many ways the Greeks deal can be done .You don?t have to
wait for seasoning as suggested. As I taught in St. Louis, there are
lenders that are portfolio lenders that will work with you.
They differ from area to area. The no brainer is what your doing Rob.
Just take a second on the house, and then refinance it a year later doing
a consolidation of the 1st and 2nd showing it as a rate reduction loan.

My suggestion is, if we are going to do deals. We should know what
lenders are available, and what they can do to compliment us in doing
our deals.
Take the time to go to your phone book, look up lenders in your area
as well as brokers. Everyone should have a relationship with their bank,
and if they don?t, then they should make it a point to start one.

They should also have a good mortgage broker, which is easier
said than done. But it?s our responsibility to find and work with people
who can benefit us in buying and selling . We have to learn how to
qualify the people we do business with.
How can anyone consider themselves a professional if they don?t
know how to finance a deal. Financing is the key to us doing our deals.

Until we understand that, and learn to use financing or lenders
to our benefit.
Were going to continue to find ourselves being victimized by the lenders
and saying the same old cliché , Banks only lend money to people who
don?t need it.

Can deals be done if you don?t know financing?
Absolutely, Where there?s a will, there?s a way. But why restrict yourself
to doing deals only one way?

My message to All, is to make it a point to learn your financial community.
Don?t be intimated or victimized by lenders. You will have more
confidence in doing your deals if you have good financing behind you, and
know where your going to get the money. If you have credit problems?
There are lenders for that too.
Sorry Rob, I guess I got carried away. But I think it?s that important.

Ed Garcia