Posted by Dallas P. Allbritton on February 08, 2001 at 18:13:23:
One piece of potential good news… With 700 scores the chance is VERY HIGH that you can go stated income. I will answer the rest first but I’d like to ask a semi personal question BUT do not reply here is you choose to, send it to firstname.lastname@example.org.
QUESTION… Why not buy as personal property.
On to the other issues.
YES the seller would have to carry a 2nd, not matter what the price if you want TRUE 100% financing (price and closing).
Stated income comes in a number of forms.
1 & 2. Stated with no IRS form and without. The form, I forget the number at the moment, when required states that the lender can pull your taxes to verify that you make what you said on the application. There is a risk in this of course. many lenders do not require the form.
No DOC where no income is listed on the application so no ratios are even established.
Lite Doc where bank statements are used. This is beneficial to someone that has good cash flow but their taxable income is low. For self employed lenders used the taxable income so if you have a good accountant and make 100K and run most of it through a bank account but get taxed on 10K you do no want to use your returns.
The addendum to the 2nd is just like an addendum to a contract where you add or remove something. I did a loan where I reduced the terms of a 2nd after the closing by an addendum. It was inititally worth 12K and I cut it to 9.5K and changed the terms (payment, amort., rate). We signed it, notarized it and I added it to my file. No need to record it because notes do not have have to be recorded.
If you have not looked at the leases and rent rolls for the past 12-24 month you want to, they tell the story.
Find the sellers motivation for selling. If they say they want some cash find out WHAT FOR and figure out how you can solve that challenge. His hott button is your cash flow and lower price.
Make the lower price easy for him to swallow by cruntching the numbers in a 2nd for him with monthly and annual income. If one of the reasons he is selling is he’s tired of managing the units the cash flow from your second may do the trick because he gets to wald away with a big chunk of cash and a small monthly trinkle. In short you have to play to his greed but you need to know that the greed issue is. Drink a cup of coffee or beer with the guy and LISTEN to him talk about the property. if OUT is what he wants all you have to do is oil his lips and open your ears.
Get pre-qualified ASAP. If you send an email directly to me I will send a reply with my site where you can do it all online securely with no cost for the report pulled.