Creative Financing of Bank REO's - Posted by Jeffrey T. Naas

Posted by George(OH) on March 26, 2001 at 16:17:35:

regarding the end of your post. You said:

“You could also secure hard money, which WILL require some out of pocket cash from you - and close this way.”

If the property is bought at a deep enough discount, i.e. the sales price, closing costs, etc. is below the HML LTV (say, 65%), would the buyer still have to come out of pocket?

I’m curious because I have an agent who will provide me with REO listings, and I know I will HAVE to use hard money.

Thanks,

George(OH)

Creative Financing of Bank REO’s - Posted by Jeffrey T. Naas

Posted by Jeffrey T. Naas on March 26, 2001 at 09:48:55:

I am still looking for creative ways to purchase post-foreclosed bank REO’s. There must be a way to do this without coming in with a ton of cash, or even standard financing. Any ideas? Also, is there some way to get REO lists directly from the bank, rather than real estate agents? Thanks for your help.

jn

Re: Creative Financing of Bank REO’s - Posted by Bob (Md)

Posted by Bob (Md) on March 26, 2001 at 14:27:02:

If you can find a real fixer-upper REO owned by a bank, sometimes you can get the bank to do a construction loan for rehab purposes. An example of this type loan might be 8% interest, interest-only payments with a one-year baloon, loan up to 75% of after-repaired value. They would release the funds as repairs were completed. You wouldn’t get any cash out, but you can probably do it with little or no cash out of pocket.

You have a year to repair the property, and then either sell it or refinance with a more conventional loan. Some banks offer a loan where the construction loan changes to an ARM or fixed mortgage after repairs are completed without having to requalify.

Re: Creative Financing of Bank REO’s - Posted by SueC

Posted by SueC on March 26, 2001 at 13:36:17:

Depends. Major banks tend to list with agents, who will have the lists. Try smaller, local banks, sometimes they maintain lists in house, and will work directly with you. Some of these banks might even fiancne you, but you’d still have to come out of pocket for the down - or out of your investor-partner’s pocket.

The creative way to do these with no money is to get them BEFORE the bank does, direct from the defaulting homeowner.

Re: Creative Financing of Bank REO’s - Posted by Redline

Posted by Redline on March 26, 2001 at 11:10:58:

One “creative” way you can buy REO’s without your own cash is to use someone ELSE’S cash. You would do this by putting the property under contract, finding a buyer, and doing a simultatenous close.

You could also secure hard money, which WILL require some out of pocket cash from you - and close this way.

RL