Hello,
I have a seller that has to properties. The properties need updating and are located in desireable neighborhoods. The seller is unloading the properties for $150,000. The rehab estimated came up to $80K ($40K each). I would like to make an offer on the property.
I have a lender that will finance the property at 70% LTV. They are requesting a 30% down payment. If my math is correct, the loan would be for $294K. With 30% ($88,200) down that would bring it proceeds to $205,800.
I would like tpo submit an offer as follow.
$238,200 with a seller carry 2nd of the $88K Down payment.
Does this sound like a good offer?
We don’t know…what is it that you plan to do with the properties?
The 70% lender is going to want to know where the other 30% is coming from and may very well balk at the 30% carryback by the seller in that you would not have “any skin in the game”…
Keith
Typically with investment properties (i.e. non-homestead), they will only lend on the purchase price and will not include the remodeling costs as part of the loan. There are some lenders out there that will do it but not many.
So that means that you are looking at 70% of $150,000. Additionally, many lenders will not consider seller financing as a down payment. They want you to have an equity position in the property. 100% Financing with a second is not considered equity.