I need some advise - Posted by Mike Aguila

Posted by JoeS on February 19, 2002 at 07:25:25:

What is the house worth? There are lenders that will do a 80/20 loan for a cltv of 100%! Your credit has to be excellent and the deal has to make sense for the lender. It can be done.

I need some advise - Posted by Mike Aguila

Posted by Mike Aguila on February 18, 2002 at 22:37:37:

Hello, I need some advise, I’m working or trying anyaway…on a deal , where the property is selling for $86,000, the current owner has a $52000 assumable mortgage and is NOT willing to take back a second mortgage. I was considering getting a second from a hard money lender, but I can only get up to 85% of the appraised value which falls close to the asking price. I don’t want to finance a new mortgage as I don’t want to come up with a down payment. Is there something else that i’m missing??? or is this another deal that I must pass???
thanks beforehand,

Re: I need some advise - Posted by Kent C

Posted by Kent C on February 20, 2002 at 04:56:36:

I prefer buying 50 cents on the dollar. The most I would ever give for a place is 80 cents on the dollar. And that assumes it needs nothing and is ready to rent. 85% is too much. You have to have a threshold you should not cross. It should be closer to 80% max. You mentioned the $86k was about 85% LTV. SO this house must be worth 100k. First, it better be fixed up needing NO repairs for this kind of money. Second, you may have $4k in closing fee’s. The most I would consider would be offering $80k-$4k = $76k offer. This is with him holding a 20% 2nd.

So I am offering him $60,800 cash (80% of $76k) at close (it is a loan from a bank) and he is to hold a $15,200 2nd. More than likelty in 5 yrs you can refi and pay this 2nd off.

But…this house better rent for $1100/month+ to break even.

I would feel better if ANYTHING were a little better. More rent, less purchase price, more equity than 80%…something. Pretty borderline.

Kent C