Posted by Bill K. - FL on January 31, 2000 at 21:47:36:
Tell them you are paying cash. No mortgage will be needed. Or if that doesn’t work and they want to see source of funds, get a hard money lender to give you the commitment. You might just want to flip it to a rehabber for a few thousand quick profit.
Help…I’m losing 1st Deal - Posted by Kim P.
Posted by Kim P. on January 31, 2000 at 19:20:53:
I put in an offer on a sfh. The original asking was 89,000 and we settled verbally on 70,000. The assessment is 91,500. The comps are 100-125 in the area. The contract says I have the right to assign a buyer as long as I give 7 days notice before closing. I thought this was great. There was no mention of mortgage committment from me. The house needs paint,carpet and a new floor in the kitchen. I was going to list it for 90,000 with 5,000 cash at closing for repairs. If I couldn’t dump it I was going to offer to pay for closing costs. Now the bank accepts my offer but wants a mortgage committment letter. I cannot provide this. This is due to damaged credit. I called several brokers in my area and explained I needed a quick loan and they acted like I was crazy and never heard of what I was trying to do. So now what? Since the bank put the right to assign a buyer I thought they were assuming it would be picked up by an investor. Do I have any other options to get around the mortgage committment? I would be very appreciative of any advice you could give me. Thanks.
Kim . . . what the heck are you doing? - Posted by JoeKaiser
Posted by JoeKaiser on January 31, 2000 at 22:50:29:
Kim, A for effort, but this looks to be a perfect example of going into a deal without really knowing what’s going on. Here are a couple problems I see:
“we settled verbally on 70,000.” What does that mean? How can you “verbally” settle on anything? Answer. You can’t.
“the contract says I have the right to assign . . .” Just a guess here, but it’s likely the clause is not what you believe it to be. Clauses such as this are not usually “gifted” to you.
“I was going to list it for 90,000.” You’re going to list a bank owned property before you own it? How?
“If I couldn’t dump it I was going to offer to pay for closing costs.” What are you saying? That the bank will just write you a new loan just like that?
“I called several brokers . . . they acted like I was crazy and never heard of what I was trying to do.” Ya know, I’ve never heard of what you’re trying to do either, and I’ve been at this a long time.
“Since the bank put in the right to assign . . .” Again, not likely what you think it means.
It all comes down to - you’re in over your head. It looks to me like you’re just mucking around and creating havoc without any clear idea of how to pull this sort of thing off. You likely need a partner with cash or credit to get this thing off the ground.
Joe
Here are some choices to consider…l - Posted by Michael Morrongiello
Posted by Michael Morrongiello on January 31, 2000 at 22:46:56:
Kim P:
I agree with Bill, tell the seller that you will be paying CASH and therefore no mortgage commitment letter will be needed since you did not intend to obtain a mortgage to purchase the property. Get them to EXECUTE a contract with you that builds in sufficient time for you to either flip the deal as a wholesale deal to another investor who is willing to purchase the home for $70K plus you spread and get their hands dirty for the larger profit which is in rehabbing the home OR another option to consider once you have a contract accepted is to attempt to RETAIL the home yourself to an owner user buyer using OWNER FINANCING as a way to cast the largest net into the marketplace and attract a potential buyer who will pay you a retail price providing you finance them. The owner financed note can be set up so that YOU can sell it at closing and use these proceeds to pay the bank the $70K they want for the home.
If you need some assistance in working through these possibilities feel free to contact me to fine tune this option at FelixM1@aol.com
Michael Morrongiello