Posted by Jack on September 21, 2004 at 11:49:50:
In some states it would be a title company instead of an attorney.
Need some stratigies - Posted by Joy
Posted by Joy on September 20, 2004 at 11:24:07:
Hi. I need some guidance for my first no money down purchaseon a investment property.
There is a seller who owns this 4 bedroom 2 bath outright. He is asking 42,500 for it. If I make the repairs he will take 38,500 for it. I can only get a mortgage for 75% of the asking price due to this being an investment property and I believe he will finance the difference. To make this a Win/win, I want to offer him his asking price of 42,500 even though I am doing the repairs, if he will finance the difference and pay closing costs. Does this sound like it will work? Can anyone give me some suggestions on how I would explain this to him on paper so he completely understands. Maybe I am just alittle scared to death of my first actually investment. Thanks alot. Joy
Re: Need some stratigies - Posted by Dave T
Posted by Dave T on September 20, 2004 at 22:18:31:
Have you tried some national lenders such as Washington Mutual or Countrywide among others? If your credit score is better than 680, you should be able to get up to 90% investor financing.
Re: Need some stratigies - Posted by Jason (SC)
Posted by Jason (SC) on September 20, 2004 at 12:09:42:
I don’t know what the FMV is, or what your credit score it but 75% LTV is not good at all. Saying you have decent credit you should be able to find atleast 90-95% LTV
Re: Need some stratigies - Posted by Joe
Posted by Joe on September 20, 2004 at 12:00:47:
How much is the property worth now, as is? How much does it need in fix-up? What will the FMV be after fixed up?
Re: Need some stratigies - Posted by Joy
Posted by Joy on September 20, 2004 at 13:17:31:
In this area, the local banks will only loan 75% of the loan on an investment. My credit is decent, so where do you suggest I look without paying through the nose on interest? Thanks
Re: Need some stratigies - Posted by Joy
Posted by Joy on September 20, 2004 at 13:17:34:
I’m not sure what it has appraised for previously. Should I ask the seller this. He is elderly and has had it rented for a long time. The tenant recently married and his health will not allow him to fix it up like he used to. It sits on a very large lot and we live in an very desirable area for bigger rentals. It needs some carpet and all over painting. A little update in the bathroom with a vanity and shower door but that’s it. I believe I can rent this house for 600.00 easy. Thanks for any assistance you can give me. 
Joy
Re: Need some stratigies - Posted by Joe
Posted by Joe on September 20, 2004 at 15:04:38:
Joy, you need to find out how much the house will be worth after it’s fixed-up. Have a Realtor run comps for you (do not sign any agreements with Realtor), or try to determine what the fixed-up market value is on your own by visiting open houses in the area, and calling the Realtors who have for sale signs in the yards in the area.
There is no way to make a decision on this property without knowing ahead of time how much it will sell for.
Re: Need some stratigies - Posted by william (CA)
Posted by william (CA) on September 20, 2004 at 14:27:30:
One more thing. Do you have the reserves to pay for stuff that breaks or wears out? If not, save any cash flow until you have a nice reserve for reparis and vacancies.
Re: Need some stratigies - Posted by william (CA)
Posted by william (CA) on September 20, 2004 at 14:24:01:
You really need to confirm and verify this info BEFORE you do any deal. You must KNOW not BELIEVE before you know if a deal is good or one to pass on.
Good luck and hope it works out.
Re: Need some stratigies - Posted by Joy
Posted by Joy on September 20, 2004 at 15:10:37:
Joe,
I plan to rent it out. I have lived in this area for 7 years and am a local Realtor, (1 month) and I know this house will rent easily. My problem is how to put the deal together. The seller already told me he is willing to finance whatever the bank wont mortgage. I would like to find out what would be an appropriate formula to offer him. I told him that I would pay him his asking price if he would finance the difference between that and the mortgage, and he agreed. Now what? Do I go through the bank or do I need to get an Attorney? Thanks for your advice Joe. Joy
Re: Need some stratigies - Posted by Tarheel T
Posted by Tarheel T on September 21, 2004 at 06:02:46:
You need to write up an offer to purchase and contract, get it signed and then take it to your source(s) of first mortgage financing to see what they will do. In the mean time take your contract to your atty and have him open a file. When your loan is a go, proceed to closing. And of course keep your seller informed of everything along the way.
TT