Posted by Junaid on October 14, 2005 at 08:32:20:
65 percent of 115 is 74K.
Your purchase price is 75K and 5K in rehab,
So you have to put 6K plus closing cost plus interest till you refinance.
I don’t think I would consder that.
If you really really want this deal and wants to go with the HML and seller won’t discount below 75K, then
Pay 60K to the seller at closing
Pay remaining 15K at the time you refinance.
Take 70K from the HML, out of which pay 60K to the seller, 5K for the rehab and remaining 5K for closing cost and monthly payments till you have your tanent after you rehab.
After rehabing the property go for refi. In some cases bank will ask you to wait for 6 months or 12 months after you buy to account the full value (110K) and not purchase price (75K).
So keep in mind that you may end up paying 14% to HML for 6 months or 12 months.