Paying 3 Mos Mortg. For New Buyer - Posted by Miked In TN

Real Estate Investing
1

Posted by jorge on July 07, 2003 at 10:47:51:

Mike,

I am trying to find out what the process of using a hard money lender is. Do they want cash up front? If so, How much. What type of experience do they want for you to have? What type of info do they need from you. (i.e. estimate from contractor, market analasis on property, etc.)
I am looking at a house that could be worth about 80k and they are selling it it for 55k. I am guessing it cost about 10k or so to fix up. I won’t pay more than 50k for it. And all I want to make is about 10k to 15k profit. Its a 1700 sq foot home in an area where a small 1000sf homes are selling for 70k in great condition.

Any ideas?

2

Paying 3 Mos Mortg. For New Buyer - Posted by Miked In TN

Posted by Miked In TN on July 02, 2003 at 19:35:45:

Is it legal in TN to pay the first 3 mos for your new buyer or maybe sell @ retail and give them 5K for fresh paint that way they pick the colors they want.In addition any tips on selling fast other than incentives like above.I have 5-day book and I am looking at nodiscount.com. Any opinions? Thanks everybody

3

Re: Paying 3 Mos Mortg. For New Buyer - Posted by Mike G

Posted by Mike G on July 03, 2003 at 08:31:05:

Not a lawyer, but I don’t see any problem w/ that approach. I actually just bought a place for $45k, but we structured it so my purchase price was $85k (which is FMV in top shape) w/ a repair credit of $40k back to me. My attorney said this is perfectly legal as long as everything is fully disclosed to all parties.

4

Re: Paying 3 Mos Mortg. For New Buyer - Posted by jorge

Posted by jorge on July 07, 2003 at 24:14:02:

As far as that credit goes, I thought you could only have a 6% credit back at closing… not 50%. I am trying to do the same thing but have been told only 6% is allowed by the mortgage people… please explain.

Thanks,
Jorge

5

Re: Paying 3 Mos Mortg. For New Buyer - Posted by izzy

Posted by izzy on July 03, 2003 at 20:33:46:

“all parties”… including the bank, i assume?

6

Re: Paying 3 Mos Mortg. For New Buyer - Posted by Mike G

Posted by Mike G on July 07, 2003 at 08:23:41:

I used hard money for my purchase. They lend based on the equity in the property and don’t have the same restrictions as conventional lenders.

I’ve definitely heard about this 6% limit for conventional guys. May want to explore whether this applies to just a gifted down payment or actual repairs. My guess is that it’s for everything, but worth checking into (maybe if money is actually in escrow to be spent on repairs the lender would have a different opinion).