I found a vacant property that I was going to wholesale to another investor. While looking for an investor, I came across a buyer who is interested in purchasing the home for their primary residence. I would like to flip the property to the buyer but the home requires alot of work. Is there anyway that I could do a double closing allowing funds to go to a contractor for repairs and my fee. Would this agreement have to be made with the buyer or seller or both? I am think I would have to set up an assignment contract with the seller and a TREC contract with the buyer for the total sales price and have the funds split at closing? Would this be the best way to go?
Howdy Victor_R:
The hard part is going to be getting a lender to loan on the house in the as is condition. There are some FHA loans and maybe some conventional as well but it may take some searching.
Do not get the seller involved. Just add a repair allowance and your fee to the contract between you and the buyer. The lender will probably hold the repair funds in escrow until the repairs are complete or allow a draw as the jobs gets to certain stages.
You will probably need a TREC contract with both parties with you selling to the buyer. Keep in mind too that some lenders require seasoning where the current owner may have to sell directly to your buyers. All the new requirements have made in more confusing. Talk to the title company as they may be able to help more or your lender.
LOL
Thanks for the reply. I am slowly starting to understand the double closing process. I will attempt this on my next deal. I have several retail buyers who are interested in property that I found birddogging, mls, etc. The only problem is the lenders that were able to give them 100% financing had seasoning retrictions.
This could be a great solution to this problem if I could master it. I still have a few more questions.
Do I use a assignment agreement along with a TREC contract with the retail buyer?
Is it possible to negoiate a deal with a double closing if the property is on the mls and assigned to a realtor?
Should I place the intial offer in my name or with my LLC. Since I don’t plan to actually obtain financing, I should not provide a pre-approval letter unless asked.
I am aware that HUD and most REO owned property does not allow assignment contracts. Can you do a double closing on a bank forclosure without an assignment. Couldn’t I simply have the title company add my LLC to the HUD statement and be paid at closing as long as the end buyer agrees to it. Likely, close the buyer first, have the funds held in escrow. Afterwards, close Hud or REO and have my fee released at that point.
Does it matter which party closes first on a double closing?
Thanks…
check out www.fsbofinancingsolutions.com they finance without seasoning issues. They do not generate the loans though. They buy owner financed mortgages that they set up. it is really cool and handy.