Need Help Structuring This Puppy... - Posted by Kevin-Baltimore

Posted by Eddie FL on February 11, 2000 at 07:46:54:


Since the loan is based on the property itself, then, your buyer does not have to worry about qualifying for the loan. Since this is the case, you can show him the commitment letter you received from the lender and assign your contract over to him and let him close. He can pay you the $5000 and then he would get the loan and finish it. Quick flip by assigning your contract over to your buyer. There may be other ways but that seems the simplest. If this guy is an investor he should understand that you are going to make a profit and he is going to make the Lion’s share.

Good luck,

Eddie FL

Need Help Structuring This Puppy… - Posted by Kevin-Baltimore

Posted by Kevin-Baltimore on February 10, 2000 at 20:38:35:

Today, I found a buyer for a flip deal that I put under contract late last week. It took me approximately four days to find a buyer. My delimma is that I need suggestions on structuring this puppy.

Last week, my realtor, “Hard-money Lender” and I met at the property. Beforehand, I had managed to contract the property for $27,500. My realtor had stated that the comps in the area are around $70,000 after repairs. I was able to get a commitment from the lender of $38k( $28k for purchase and $10k in escrow for fix-up)and all I needed were closing costs. However, I am not interested in doing the work. I just want to pass the deal along to a bargain hunter who enjoys rehabbing.

I advertised the property in the following manner: Sales price $33,000; Financing and fix-up money available with $5,000 down. I have heard it done like this, but am unclear as to how I should structure it. What do I tell the title company? What do I tell the “Hard-Money Lender?” How can I bring all the pieces together and make this a smooth transaction?

I would appreciate any and all suggestions.

Thank You,


Re: Need Help Structuring This Puppy… - Posted by SCook85

Posted by SCook85 on February 11, 2000 at 20:16:43:

Call me with the details, I need homes and may just take it off your hands.
Otherwise I’ll tell you what to do.


Re: Need Help - PRO’S TELL ME IF I’M RIGHT!! - Posted by JB - MD

Posted by JB - MD on February 11, 2000 at 08:07:22:

I am a newbie, so wait to hear from others as well. However, it seems to me that you need to use an Assignment of Contract contract to assign you right to purchase to your buyer. You should be able to collect your 5K as soon as you assign, and then you are out of the loop, and you won’t have to bother with the closing. The title company should have no problem with that, especially if you get it notarized. Also, your hard money lender will probably have no problem with it either, since he is not basing the decision to lend on you, but rather on the Loan to Value ratio (LTV=54%), on the After Repaired Value (ARV), and on the equity in the property.
Also remember that you said that you were going to have to come up with the closing costs, so now your assignee will need to cover your portion, in addition to paying your ‘finders fee’ of 5K.
Please keep in mind that as I said, I am a newbie, I have not done my first deal, and this is only my opinion.

I would appreciate anyone else’s opinion because I am still trying to get these concepts down as well. Thanks in advance for any feedback.

Germantown MD