Hello does anyone know if this is true…I heard that if my assigne(end-buyer) is using conventional financing to close on the deal, the lender will not allow an assignment contact.
you will not be able to use a traditional assignment of contract at any level if the property is a bank owned property. The banks contracts are non assignable. There are ways around the issue, but when the buyer has conventional financing it makes it even tougher because of seasoning requirements.
Can you explain the seasoning issues that can arise.
I mean if the property has no mortgaqe and im getting it under contract for $100k and assigning it over to my end-buyer for $110,000. Will they be able to get a Conventional loan and would I be able to assign my contract and make the diffference($10k)?
The answer to your question depends on the lender’s seasoning requirements. Some lenders require title to be held for a certain number of months (30, 60, 90 days, etc…) and some lenders have NO seasoning requirements. You’ll have to find out what financing your end buyer is using to discover what title seasoning requirements might be in place. For example, if your end buyer was using an FHA mortgage, you’d have to be on title for 90 days before FHA would fund the sale to the end buyer.
Thanks for your answer. So even being the middleman they would want me to be on the title for at least 90days?
IF your end buyer were using FHA financing, otherwise it just depends of the lender
In these types of situations you have to require the end buyer to use hard money, close with cash if possible. If not cash in the bank, then from an IRA or other Retirement account. Cash or Hard Money.
Only other solution is to find a loan from a small bank that doesn’t require seasoning.
You may possibly be able to add the buyer to the contract you have with the bank and have them bring your fee in cash to the closing in exchange for you doing a quit claim deed and taking your name off the title. But if the buyer is using conventional financing the lender may require any party on the contract to also be a co-borrower on the loan. This is a concern of mine, but I can’t say it’s fact. I thought of doing it this way with an FHA buyer but I chickened out a little bit.
If anyone knows different I’d love to hear if this is feasible when dealing with a conventional loan/fha loan.
The best way to close an REO with conventional financing is to close with private money or transactional funding and then re-sell to your end buyer. I do not see it working any other way. Title company’s are done with kiting funds.
You could create a LLC and take title in that, then assign the interest in the LLC to your buyer.
I don’t see how you would use transactional funding and re-sell to the end buyer. The end buyers lender will require 3 months seasoning unless the end buyers lender is a private money lender, hard money, cash.
Not all traditional lenders require three months seasoning. That’s a myth. You just need to ask around and find out who is doing what.