I am shopping for a duplex or fourplex with one vacancy for me. How can I structure the deal so that I can get cash back at closing?
Yes, it is possible to get cash back at closing. There are many methods to do this.
Mike
:help Would you like to share some info with me, Mike?
When making the offer, ask for 6% of the loan, for repairs. (thats what I think it is in Texas). You also have to come up with 6% of needed repairs=) My realtor did a seperate agreement on the side for more $$$, but I have since then heard that is illegal.
Wow. Both you and your agent could be invovled in a loan fraud case if extra money was not disclosed on the HUD-1 and to the lender. Because of the huge amount of loan fraud the past few years, lenders don’t want to see a lot of repair money in the contract and may decline the loan unless you’re getting a construction loan. In that case, the appraisal will take needed repairs into account.
If repairs are in the contract, the lender may put the money in escrow to make sure repairs are made. Either way, ALWAYS be honest and straight-forward with the bank on condition of the property and cash concessions.
Cash back at closing is easy—here’s how it typically goes:
- Tell the first and second lien holders about your intentions.
- Wait to hell freezes over.
There are methods that don’t include step#1, which leads to waiting for step#2 to happen while you are in the pokey doing time for mortgage fraud.
Why do you need cash back—there are programs that allow for up to 97%~100% financing for owner-occupied triplex/fourplex purchases depending on…
Regards,
Scott Miller
Wow, I had heard infomercials say that it is possible so I had no idea it was illegal. So sorry to insult your integrity with the question. :embarrassed
No apologizes required—how would you know?
I’ll tell you a secret, I felll under the same spell prior to joining the industry----Dave Del Dotto was hocking this crap on late night television when an ambitious, 20 something young man just off the boat (Navy Veteran) with a young family was trying to expand his financial horizons.
25 years later and “being in the know”, this is what I know about 99% of the late night so-called experts—they are highly effective marketers of information that is virtually worthless, outdated and/or outlawed.
You did the right thing—if it sounds to good to be true, ask before you act…
Regards,
Scott Miller
:biggrin So it is confirmed, if I get cash back at closing, put it in the bank for bail money, right??
So it is confirmed, if I get cash back at closing, put it in the bank for bail money, right??
You might sneak it by once or twice. However, when you get caught… :flush
:eek Nope, I will avoid it all together, since I won’t know when the hammer will fall. Thanks for the info
What if house appraises for $840K, seller owns house free and clear, only NEEDS $740k, agrees to put it under contract for $840 with an amendment in escrow that seller will credit buyer for “services rendered”
Would that be ok to cash back at close?
Thanks,
uscdave
What’s the big difference between someone getting money back at closing or waiting to turn around and refinance the property and pull the cash out then?? other than playing the waiting game. I’m new to the business so I’m still trying to understand some things.
uscdave,
that would be too easy and LEGAL.
Here’s your cash back at closing. Doesn’t work in every state. Here’s how I write the offer: Unless the property is horribly overpriced I offer 95% to 100% of list. I ask the seller to pay all closing cost and if allowable pre-paid expenses (subject to loan guidelines). My buyer applies for 100% financing or FHA with DP assist. We ask the seller for a 12 month tax proration. The net effect puts anywhere from 2% to 6% in my buyers pocket at closing. All perfectly legal and usually enough for the new appliances or hot tub, or whatever. None of the above is a seller concession and doesn’t reduce the sales price.
-H