Getting money from lenders for repairs - Posted by Tim
Posted by Tim on March 02, 2001 at 19:34:10:
I have a 3-family unit that is very old but in very good shape. The sellers want 100K for it. I’ve estimated that we would need about $1500 to clean up the second floor at minumum. The first and third are OK as is. Here’s my idea:
Offer the sellers 110K with the stipulation that they give us back 10K at closing for repairs. (This would give the sellers their asking price.) I think we could easily stretch the repairs to 6 or 7K and up to 10k with some creativity if someone asked us what it was going to be used for. (I have all intentions of telling the lender what the extra 10k is for upfront). We would be putting down 10% so our mortgage would be on 100K. As I’ve stated before, this gives the seller there asking price and we would have 10K to use towards clean up of the property (1500) and to replace a large portion of our downpayment (remaining 8500). I have read of people doing this on this board but I don’t know if they’ve done 10% for repairs. I think I’ve read about it only being done with 4 or 5%. Is my idea legal as long as your upfront with the lender? I can’t imagine the sellers would baulk at it because all they care about is getting their asking price, which they are. Any thoughts or suggestions on this would be greatly appreciated. Thanks.