HI EVERYONE,
I AM A NEWBIE STARTING OUT REHABBING REO’S,I JUST FOUND A DEAL,BUT I AM STILL AFRAID OF THAT FIRST STEP IN THE JUNGLE. ARV/COMPS FROM A REALTOR SHOWS HOME IS VALUED AT 100K,ASKING PRICE IS ALREADY AT 50% (50K) I AM OFFERING 40K BECAUSE THERE ARE SOME TLC TO BE DONE,CONTRACTOR SAYS 10K THE MOST IT’S JUST PAINTING AND CARPET.I WANT THE DEAL,BUT MY CONFUSION IS ON THE PRIVATE LENDER,I CAN BORROW 80% VALUE @12% INTEREST,DOES THAT MEAN I CAN CLOSE FOR 80K,EVEN IF I PURCHASED AT 50K PLUS 10K REPAIRS ,I STILL WALK OUT WITH 20K AT CLOSING FOR ME.IS THAT RIGHT,I RUN IT ON PAPER MANY TIME,I STILL CAN’T BELIEVE IT.PLEASE HELP,I AM SO EXCITED,MY FIRST DEAL.
most of the time its 70%, not 80%, and that is the max you can go to for purchase/rehab, normally you will be required to bring closing cost (but I’ve heard of exceptions to that) ,
It’s also normally 14% (but thats in my area) and they charge 4 points (again, normal in my area),if you don’t have experience with the lender he might go more like 60-65% depending on your credit/experience