Posted by Mark on March 15, 1999 at 15:52:33:
Do you have any details on who will do an 85% non-owner occupied cash out?? I don’t think I have heard anyone going that high and would love to talk to them. Tks,
Legal and Ethical? - Posted by Laure
Posted by Laure on March 14, 1999 at 10:26:52:
Yesterday I got an offer accepted on a bank repo. 34k. Needs 6k improvements. Kitchen cabinets, vinyl and new furnace/air. (I’m on the high side on costs) Four offers came in before mine and were turned down. So I offered all cash 15 days closing. I have the cash, but it will leave me broke.
Is it legal to sell the property to another (my son or partner…son is 18) for 45k to cover payments, improvements, etc. Supervise the rehab, and split the left over cash and sale proceeds? My son would have to take a loan. If he keeps the cash in his own account and not mine, is this legal?
Laure 
Re: Legal and Ethical? - Posted by JHyre in Ohio
Posted by JHyre in Ohio on March 14, 1999 at 10:37:38:
Laure,
Sadly, I did not run into at the convention. We’ll fix that in the future. I cannot think of anything illegal or (in my view) unethical about your proposition. It seems that people on this site do the same thing with non-relatives all the time. Certain IRS rules can cause trouble for “related-party” transactions, but that does not strike me as an issue in your situation.
Seeya,
John Hyre
Re: Legal and Ethical? - Posted by SCook85
Posted by SCook85 on March 14, 1999 at 10:37:11:
Laure,
There really is nothing wrong with this. Investors do it all the time. The downside to the problem is this, you have to pay for 2 closings (In Maryland that can be costly). You also don’t want the banks to know exactly what you are doing. Another problem may be that the banks won’t finance the property for your son because the title has not been in your name for more than 6 months. Look into these before moving forward.
Here is a suggestion for you, why don’t you just pay cash and get a refinance started now. If you deal with a small local savings and loan, I’ve seen them cash people out and put money in there pockets withing 30 dyas of you buying the property. Worth a shot.
SCook85
Re: Legal and Ethical? - Posted by Kev.
Posted by Kev. on March 14, 1999 at 14:18:36:
I am working on a deal like this right now.
I have a buyer who will pay cash on an almost foreclosed house- about 190K. The house is worth 272K- already appraised- and the buyer has already filled out the paperwork for the loan to refinance the property as soon as he closes the cash transaction. The loan is an 85% cash out refinance - non-owner occupied.
The bank has no problem doing the loan so quick as there is a lot of equity in the property. Also, the house is sold on an equity share for a payment that more than covers the monthly to the bank.
The bank has no problem doing this loan.
Just my experience.
Kev.