First house - process questions


My question is on how the HML process affects the purcahse agreement.

I have a house 120k ARV (low end), repairs 20k (high end) and made an offer that will probably be accepted. The offer is 80k and it is an REO

  1. What do I do about inspections? Per a standard purchase agreement inspections are due within 10 days. For my first flip I have been told that a HML will take 20-30 days. I don’t want to pay $300-$400 for an inspection and not even take the house.

  2. Even though I put on the agreemet I was paying cash it will take me 3-4 weeks to get a HML because it is my first time and I have no relationship with any HML. This doesn’t look good. I am paying cash but it will take 2-3 weeks to get the money?!? Can I put in a clause that says they can sell the house if they receive an offer in this timeframe? I guess the question is has someone done this before?

  3. Can i put in the PA that I will get it inspected after money is secured? I know I can do this but if I go to buy an REO and come to the table with an untraditional PA would this hurt my chances?

Basically I have zero personal dollars to work, have no equity, and my credit score is poor (600). Plus, I don’t want to hold the properties…I just want to flip them.

Thanks in advance for all of the input!


You actually have a credit score that would qualify you for 100% financing with alot of banks.

While it may be true that you would qualify for 100% loans with a 600 score…it will be extremely difficult to get them done with no reserve monies or closing costs.
Especially on N/O/O properties.

Concessions can be negotiated with the seller to cover closing costs. However, not having any reserve monies, with that low of a score, hurts your chances of approval.
N/O/O loans are a little more difficult than Primary properties.

HML’s are not going to lend 100%.

Hello, Mark is correct. HML loans only go as high as 70%. Also, they too ask for cash available or equity in other properties (or your personal home) or collateral to secure the loan. Now, your credit score would be acceptable for an HML.
As the old saying goes, “it takes money, to make money”

No 70% is not true if your area HML go to 80% in my area which is UT and ID I can get to 80% LTV 100% deals so it does depend on your PI OR HML if you know who to got to.

NOW if you are using National lenders they only go to 70% that is because they do not want to spend there resources or Increase the risk and If you have a local person they may be willing to go up

I looked into a 100% investment property loan recently for one of my clients in a similar situation (with a traditional lender), and you are unlikely to find 100% as Mark said. HML will be the only way. If it’s a good enough deal, which it sounds like it is, it may be worth gambling the $300 for the inspection (although $300 seems high). Seems like a much better gamble then taking the money to Vegas.