:help We have a house under contract for $54,000 and the buyer wants to use financing. How do we get the deal done with financing? Can we do a double closeing with the buyer coming in first and then the seller or can we assign the contract to the buyer? What would be the best way to do the deal so it closes with no problems? We also heard something about using a promisary note? Can it be done that way and How exactly do you get a promisary note done? Your info is greatly needed. Thanks for your :help. We don’t want this deal to fall through so if anyone knows how it can be done, please explain. :biggrin
what type of financing? Hard Money? Hard time if conventional. Double close more than likely
It is financing from a small bank. Do we need transactional funding if we do a double close or can we bring the buyer in first and then the seller next? We have done deals with cash buyers but never financing. So we are wondering how its going to work. Thanks
buyers loan has no seasoning? No double close if a seasoning requirement.
If no seasoning process should be the same for a double.
Have to find an attorney/closing office that will do a double on a conventional loan.
Need transactional funding for the A to B
Do you have contract with a private seller or an REO?
Private seller
If the new buyers loan is a private seller or hard money loan doing a double closing should be no problem.
If the new buyers loan is FHA loan you will have a seasoning problem, meaning you’ll have to own the house for 90 days until the new buyer can close. In this case you can always lease option the house to the new buyer until the 90 days is up.
If the new buyers loan is a regular conventional loan the legal way is to borrow the money for 1 day so you can close legit and the new buyer closes after you. Most banks want to see you close in your own name with your own funds before you transfer the property. You can google “funds for a day” and there are many people who will loan the money for a day. Good luck.
If the seller is a private seller then you can do 1 single closing with this deal. Transactional funding is not needed.
Draw up a contract with your buyer for your mark up price.
Turn around and have the seller fill out a Invoice/Release agreement for the amount of your fee and let the buyer close direct with the seller at closing.
The invoice release will instruct the closing agent to pay you a check in the amount of the difference between the buyer price and the sale price.
For example
You bought for 54k
You sold for 64k
Seller signs invoice/contract release agreement for 10k
Your buyer closes with the seller for 64k
Ordinarily if you did this without signing an invoice, the seller would get 10k extra over the original sales price. But since you are having the seller sign an invoice for 10k it instructs the closing agent to pay you instead of the seller.
Do it this way and you will have no problems with seasoning!
Trust me it works like a charm
Could you send us a copy of an Invoice/Release agreement or do you know where we can get one at? We have an assignment form but would like to know what this Invoice/Release agrement is. Thanks for your :help.
What is your email address?
thanks for your help bashir! :biggrin
let me know how it goes
I learned and implemented this from John alexanders Inverse purchase system.
Bill Bronchick also has an article on REI Club called “Illegal Flipping and Lender Seasoning”.
He says at the bottom of the article:
“If you do get into a last-minute jam in a double-closing situation, there is a solution, which is called a “reverse assignment”. You simply assign your contract with the end-buyer back to the owner and step out of the deal. Your “consideration” for doing so, is the profit you would have otherwise made. This consideration can be documented in writing and secured by a lien on the owner’s property to be paid to you at closing.”