Need Hard Money or Conventional - Posted by Claude

Posted by Ben Carmona on June 18, 2007 at 22:59:17:

Ok, this makes a little more sense.

So if you run the same #s I gave earlier the only thing that changes is that she’d hold a $1OOk 2nd. Now, if you only wanted her to get $40k at closing that would increase her 2nd to $160k.

There are some things that need to be addressed to properly discuss options any further.

Ben Carmona

Need Hard Money or Conventional - Posted by Claude

Posted by Claude on June 17, 2007 at 21:45:54:

Here’s the scenario:

I live in California
Subject Property is in Connecticut
Property is a duplex (two family)
Property has a $18,000 second, no first (paid off)
Property was appraised a year ago at $300K
This home belonged to my deceased brother
My Mom is the executor
Want to write up for $300K and get a 65-75% loan to have $40 K for repairs and holding costs the rest to Mom; Mom will hold a note for the balance
Plan to sell after repair (mostly cosmetic)
I have 550 credit and am self employed for less than two years

Can anyone recommend a lender that can help me get this done FAST!!



Re: Need Hard Money or Conventional - Posted by Claude

Posted by Claude on June 18, 2007 at 14:41:49:

Thank you for all the responses. I would like to clarify a few things.

The home appraised at $300K a year ago, but Mom will discount to $200K
Zillow comps show current value at $344K-349K
I just want to borrow enough to give Mom 40K to relocate to California and $40K for rehab, contingencies and holding costs

Thanks again!

Re: Need Hard Money or Conventional - Posted by Mattg

Posted by Mattg on June 18, 2007 at 12:44:32:

If you don’t get my email here’s where you will run into problems- The transaction your trying to do is called an arms length transaction or “gift of equity”, they are used for owner occupied loans by most lenders.your transaction is a “non owner gift of equity” something of a rare breed thereby needing a speicialty loan. I can see what you want to do and if you need a specialist-let me know.

Re: Need Hard Money or Conventional - Posted by MattG

Posted by MattG on June 18, 2007 at 09:23:44:

Sent you an email.

Re: Need Hard Money or Conventional - Posted by Ben Carmona

Posted by Ben Carmona on June 18, 2007 at 08:54:11:

A hard money rehab loan may work if you have to go that route but we need to know more specifics.

Value after repaired, where are you coming up with this figure?

Are you saying that you’ll write up the offer at $300,00?

Let’s assume so and that value is around $300,000 as well due to market softening in CA.

Due to your score, let’s assume that the lender only allows for 60% arv. (May be other lenders with higher ltv).

$300k x 60% = $180,000 - $25,000 cost and 6 months interest - $40,000 rehab - $18,000 first lien = $97,000 to apply to sales price.

So that $97,000 would go to your mom and she’d hold a note for the $200,000? I’m not so sure that a hml would allow for such a large 2nd to be carried.

Where does your profit come in? Maybe I missed something?

Ben Carmona

Re: Need Hard Money or Conventional - Posted by Ed Garcia

Posted by Ed Garcia on June 17, 2007 at 23:46:07:


Just for your edification this property now has an $18,000 first mortgage. Once the senior lien pays off, the junior lien now takes precedence and automatically moves into first position.

Sorry about your deceased brother, however there will be procedures to follow before you can borrow against it, such as an affidavit of death on him allowing your mother to execute the estate. Your mother being the executor allows her to borrow against or disburse of this asset according to your brothers will.

If by chance she is in a position to sign it over to you to borrow against, with your credit score, you wouldnâ??t get a favorable loan. You make mention of a 65 to 70% loan to value of $300,000 and then you say she only needs $40,000 for cosmetic fix up. You also say the intention is to fix and sell. With your credit, other then going Hard Money, my suggestion would be, just go to American General, House Hold Finance, Beneficial Finance, City Finance, just to name a few. These are finance companies that can move fast and can do make sense loans with less then average credit.

Ed Garcia