Posted by James Hardee on July 12, 2002 at 11:45:34:
I’ve been advised by another investor to do the following:
Seller uses quit claim deed to transfer ownership to me and at the same time I’ll sign a promissory note to him for 95K which will stipulate that the amount is to be paid in full once I have completed the refinancing.
A trust deed will be recorded and will be paid by proceeds of the refinance loan.
I will then get the title company to order the survey and dividing of the property.
The new survey for the residential property will then go to the lender along with the appraisal so the refinancing can be completed.
Is there anything I’m overlooking? Does anyone see any reason why this wouldn’t work?
Request help structuring purchase/refi deal - Posted by James Hardee
Posted by James Hardee on July 12, 2002 at 10:40:20:
I’m trying to purchase a mixed-use property (13 acres with SFR and a commercial building).
Scot L suggested in his response to an earlier post that I could “have the current owner deed the property into your name, and secure a lien on the property between you and them. This way you could treat this transaction like a no seasoning refinance, instead of a purchase with a cash back transaction at closing.”
I have found a lender who will do the refinancing based on an existing appraisal of the property excluding a commercial building and one acre. I’m getting ready to approach the seller and I need to be clear about how to execute the transaction.
The steps I have to do:
Get the property formally tied up (where seller is due $95,000)
Have the property surveyed and divided into the residential and commercial parts (12 acres and 1 acre).
Apply for the refinancing for the residential property (80% of $175,000 appraisal amount).
The devil is in the details. Can anyone describe the agreements/documentation whereby the seller would deed the property to me and at the same time establish a lien against it so I can proceed with the financing?