Cash for closing as an issue

I have been wanting to get back into the investing game after some time away, and as personal situation would have it I have little cash but excellent income and credit. I found a floreclosure with tons of equity (40% at current value -about 130k in equity!) and it looks like my offer will be accepted. I may lose it if I can’t produce cash needed for inspections and various other things. Seller is paying a large percentage of closing costs, with some for me to pay- yet I’m strapped for the remainder. No 401k or friends/relative to borrow from. Is there a way to get the comparitively small amount of cash to NOT lose this enormous value, Are there lenders that do this/ if so who where??.. THANKS

With all that equity ask the bank to give you a 2nd on the property or something. Next time build that into your offer i.e. “Seller will credit buyer up to xxxxx” and make sure ‘xxxxx’ will cover all closing costs. You stated that the seller is already absorbing a chunk of costs so there can’t be that much left, just ask the bank to either add it onto the loan amount or give you HELOC 2nd or something.

Thanks JBaldwin,
I appreciate that! I need to sharpen up quickly on my negotiating skills, and speaking my opinion if I’m to get back in this game. I felt I did pretty good in all aspects of the deal so far except for this issue.

The realtor persuaded me that some money needed to be coming from me personnally to appear more favorable in the bid process that took place. Yet in retrospect, the bank that has this REO property needs it off their books and I am sure does not care where the $'s come from, as long is they get the cash- wouldn’t you agree?

Again, thanks for your reply.

I would agree. I don’t invest in short sales or anything of that nature as of right now but I do know this. Your Realtor is just that…a Realtor, not an investor.


Since this is an REO the bank that is selling the property is not going to be concerned about whther you have the money for closing or not. You will most likely have to come up with some money for earnest money and option money. Have you lined up financing? If so maybe your broker will allow you to roll the appraisal into the loan. You may also speak with your loan officer regarding the yield on your interest ratre. You may be able to take a higher rate and use the yield to cover some of your out of pocket expenses. Hope this helps.

Also if you have good credit and any credit cards with a good limit you can always use a convience check from your credit card. Just copy the check and have the statement handy so you can give it to your broker to show seasoning of the funds used.

I would check with your broker first on this as rules have changed alot and I no longer use traditional financing. But a couple yrs ago when anyone got a loan that could FOG a MIRROR I did that alot on deals where i got cash back since the credit card company would give me the money NO INTEREST 6 to 12 months and either no fee to $75 max so really I did not care. I would pay back the money after I close and did my cash out in 30days…