Is this Deal Salvageable?


I found a Real Estate Investor who was in the process of liquidating his properties. His last property was a duplex used in Section 8. The property was being taxed at a value of $40,000 (his purchase price), but had a remaining mortgage of $30,000.

The deal was for an assumable loan on my part with the bank. The bank would not do an assumable loan, so we drew up paperwork for a loan in the amount of $30,000.

Here’s where the deal has come to a stop. The appraiser decided that since we were purchasing for $30,000 that the value of the house was now $30,000, instead of the $40,000 that we were hoping for. Now the LTV Ratio is above the 70% mark that I needed to keep me from putting my own money into this deal upfront.

Without investing roughly $7,000 as a down payment, does anybody see any solutions to keep this deal alive as we intended it to be?



use a credit card

Thats the trouble with using banks. They want cash down. I have found that I do better with banks financing after I own the properties free and clear. For example, recently I had three free and clear rentals. I borrowed twice what I paid for them. The bank had them appraised and loaned 80%.

I bought another property last year, a HUD foreclosure for $32,500.00. I used my cash then got a loan using the house as collatteral. The house appraised at $50,000 and I got a loan for $40,000.

The key is to own them before you go to the bank.


“Creative” Real Estate Online

The key word being creative. Paying cash and then refinancing works great I guess if you have money. Most of us dont have that…at least not when we start.

My last purchase was a house I closed 2/8/13 on land contract and signed a lease on 2/12/13. Currently, I mean everything figured including insuarance I have a little less than $150 actual cash tied up. Thats creative dealing…

In this case I would look at 2 options…

1st- see if the bank would loan 60-70% of the purchase price and allow the seller to hold a 2nd mortgage on this property or another if you have one.

2nd- see if the seller do a land contract with a 3-5 year balloon so you can build some equity through amortization and refi through a small local bank.

Good luck and keep us updated in this thread as to how it turns out.

Im closing a house on contract with very little down in a few weeks that will put me at $610,000 in land contract purchase with low downs since August 2011.

You can build a portfolio with very little capital. The deals are out there.


Thanks for the information. Here is what happened. The bank decided to waive their 70-75% LTV Ratio for me, thanks to the owner asking them to make this happen for a new investor. I paid $2000 ($500 appraisal, $1500 closing), and have the duplex for $29,500.

It is rented through Section 8 ($375 x 2/month)…mortgage, insurance, property management co, taxes and water cost me roughly $470/month.


Here is a second portion to this property…

There is a second single-family home that the owner is willing to finance through a wrap.

Here are the numbers.

$50,000 sale price with $2,000 down.

$48,000 price, 20-year, with 2-year balloon… mortgage of $300/month.

Home is rented out through Section 8 for $636/month.

Taxes - $57/mo
Prop Mgt - $64/mo
Insurance - $45/mo

$2000 down, $466/mo, leaves $170/mo leftover.

I would use this property as well as the one mentioned above as collateral.

What are your feeling on this?