Posted by David (GA) on March 25, 1999 at 07:59:49:
It sounds like you know something about the subject,
I want to get into this area. Please tell me more, where you learned how to do it, and how long you have been doing it. Any information would be appreciated.
Thanks
L/O, option is exercised!!! have question??? - Posted by johnman
Posted by johnman on March 24, 1999 at 19:41:56:
Hi folks,
Here is a scenario.
Purchase price of $75K
Option money $2,500
$0 rent credit
Balance due is $72,500.
When the buyer applies for a loan, does the buyer have to pay an additional 3% down (FHA loan) or just plain additional down payment? Would the mortgage company use the option money given as down payment? Would the mortg co loan the full $72,500?
Just a bit confused! Thanks for the inputs!
Johnman
Re: L/O, option is exercised!!! have question??? - Posted by DanM(OR)
Posted by DanM(OR) on March 25, 1999 at 11:27:27:
Johnman,
I am into L/Os and have an aquaintence in OH that has several lenders that he works with that will use the option consideration and rent credits as a down payment. I haven’t had any L/Os exercise on me YET, but I could hook you up with him and you can give him a call and get the ball rolling from there. Do your own due dilligence though my friend. Like I said I have not had any experience yet with his lenders and he is not my best buddy or anything.
take the NOSPAM out of my email above and I will hook you up with him. By the way, I have no referral arrangement nor would I gain anything from you doing business with him. Just friendly advice.
Your Investor Friend in Bend,
Dan Matejsek
My Experience - Posted by John Katitus
Posted by John Katitus on March 25, 1999 at 01:33:29:
I am just now cashing out on six L/O’s, with tenant/buyers getting new mortgages.
All have used their deposits as part of the down payment. We carefully documented their deposits, getting money orders or bank checks and copies of my deposit slips. Only one lender requested to see the documentation.
Did you tell your buyer that the $2500 would count as part of the down payment?
My current cashouts are being done as refinances of Land Contracts, even though they were L/O’s. That way they can lend X% of the new appraised value and disregard the sale price. The difference between the appraised value and $72,500 becomes their equity (down payment), and might even get them out of FHA or PMI if the appraisal is sufficiently high.
Re: L/O, option is exercised!!! have question??? - Posted by johnman
Posted by johnman on March 26, 1999 at 19:00:22:
Dan,
Darwin is pretty cool. Thanks! He is sending me his requirements. I’ll keep you posted.
Johnman
Re: My Experience - Posted by Johnman
Posted by Johnman on March 25, 1999 at 14:59:14:
JohnK,
Thanks dude. This isn’t an actual event but I will run into this situation here real soon. I was just confused on what happens to the option money in relation to the money the tenant/buyer is about to borrow.
I appreciate the input.
Johnman