Hard money lender or Bank money

Here’s my situation. Have the opportunity to purchase a house for 89k (worth about $130). The current tenant wants to buy it but can only get 80% financing. I would prefer not to do a rent to own but purchase the property for 89k and then sell it to him for $130. He can get a loan for 80% (104k) and I will hold a 2nd note for the 20% (26k). Can I purchase the house with a loan from the bank and then turn around and sell within the same month or is there a seasoning issue?
If I were to use hard money lender, what do they normally charge. I know each lender is different but I’m looking for the basic idea.
Am I better off using a bank (closing fees)or hard money lender for this deal
Thanks

Hey,

Couple things:

  1. How’s your credit?
  2. Where is the property located?

Hard money is fine, so long as you know what’s going to happen after you’ve bought it. Be sure the tenant can actually get the 80%.

If your credit is good enough, I have several ideas in mind for which I think you’d be a perfect candidate.

Let me know.

Regards,

Jon

The seasoning issue is not so much a factor in your acquisition but in their ability to acquire financing. Most lenders do have seasoning requirements.

Your loan would be a 100% financing loan and depending on your credit quality and the property type it may be possible on an investment. Be alert to prepay penalties if you are liquidating that quickly.

Hi Group…in this post (quote) if the tenants credit is good enough to get 80%=104k, the why could he not
get the full 89k with doing an 80/20?
Always thought i was pretty good in math, but this stuff
sure ain’t 2+2=3 is it? Shoot, while i’m at it might as well ask another, what is CLTV…LTV(loan to value)…
but C? Know i’m gonna hate myself for this one. :-[
Thanks

From the “Investing Abbreviations” link to the left side of this page:

CLTV = Combined Loan To Value

Keith