Bank owned financing...Will this work?

We are thinking about constructing an offer based on the following and need some advice:
We have found a bank owned fixer upper listed on the MLS that will fit into our rehab requirements. Could we make an offer that the deal is contingent on the bank that owns it providing us temporary financing for the purchase price plus rehab costs? For the record, we intend to have the house sold (thus refinanced) within 6 months.

Could this work or is there a major flaw in the plan?

That is a feasible offer as long as your credit rating is sufficient to qualify for the loan…I am getting ready to make a similar offer on an REO but I am going to ask for a sub-standard rate and a 4-month delay in starting payments…

We’ll see! You never know unless you ask – lenders can’t make loans they never see!


Howdy DK:

I see major flaws. Banks do not like to finance junk they have taken back. They just want out for cash. There are exception of course. LOL to both your offers. Post back to let us know what happened.


It’s end-of-year and I’m hoping that they want it off the REO books more than they would not like to re-lend against it (if that makes sense…??). I have 800 credit so that is favorable for them… but the only way this one is going to work is they re-fianance it or they take a lot less money than they’ve listed it for. They’ve listed at $59,900 but that is near-retail for a nice house in this neighborhood. I’m thinking more along the lines of $37,500 with about a $10-12K fix-up…I could then sell for $60-62K or rent for $750.


Howdy Keith:

I did do one where Bank of the Hills foreclosed at $900K loan and sold it to us for $300K with $50K down. Same situation where Lady Bird Johnson owned the bank and was getting hell from the Feds for the bad loans. I remember going to the closing and asking why they had not even asked for a financial statement or a credit report. Just wanted the asset on the other side of their financial statement was the only answer I got. Wish it were still like that today.

Well, I guess it wouldn’t hurt to put the offer out there, all they can say is no, and if they do, maybe we can get some insight about how these deals will or won’t work. The end of the year angle is something I haven’t even considered. Thanks for the input both pro and con. If we decide to make an offer after we look at it this weekend, we’ll report on the outcome.

I actually plan on submiiting a dual-option offer:

(A) $37,500, all cash, close in a week

(B) $45K (or so, haven’t crunched the numbers), 100% financed at 4.5% or 5% for 30 years…

The worse they can do is laugh and say, “I don’t think so, Scooter!”…


Hey Keith,

Good luck with the offer and let me know how it turns out. I’m looking at doing something similar with an REO that has been listed for quite some time. Can’t hurt to offer!

Mark ;D