I’m looking for some help from the pros? I’m looking at a bank owned three bed, one bath single family home. The house will be purchased to live in as my family home.
The house is a three bed, one bath single family home. and sits on 10.5 acres. Listed for 57k.
So i called the listing real estate agency and asked to see the property. the agent tells me that it has a well/septic problem, Failed inspection. and the bank would want cash because they wont finance it with the failed inspection. Told me to go to my bank and find the money then call her back.
I’ve read it cost up to 10k for a new septic system, but this is still an unknown amount.
I need to find a way to make this purchase. The price is right. Here is my problem. I dont have 57k. I have around 10k in the bank and only make about 30k/yr with piss poor credit. so if no one will finance the house as/is because of the septic problem. Can i work a deal with the bank that i use my 10k i have to repair/ replace the septic and then the give me a mortgage for the full purchase price.
or. find someone to lend 57k to purchase. I fix the problem. Refinance the property for 30 yrs and repay the original lender.
Any ideas how to do this?
Find a lender that can make a 203k loan. This is purchase and rehab in one loan. Should not be a problem to include the septic cost's and any other repairs / remodel within the loan.
So this is a CASH ONLY TRANSACTION? NOPE its not…
I just did a deal almost just like this. Here is how I did it and I hope it gives you some Ideas.
6 plex bank owned! Last owner foreclosed while the construction was still getting completed. He was asking $225,000 per unit. After the Foreclosure process lender was looking for $67,000.00 per unit. (remind you the construction was still not totally done)
Anyway here is how the deal went down.
Bank holds the property while repairs are getting completed.
Bank Escrows the funds to complete repairs.
Bank will then be able to sell the properties for $180,000 a piece (Yeah last owner was a little to proud of them)
In exchange for my efforts Bank agrees to give me one unit free and clear!
Total out of my pocket $0 dollars total profit 1 free unit worth $180,000.00 (give or take)
So here is what I would offer the bank they hold the property and escrow the repairs and fund you for the property as soon as it passes inspection.
Summit, how do you protect your interest in such a transaction?
When you are working with a large lender it really is nothing to worry about. Everything goes thru the title company and everything is in a escrow account.