This question is for those that have done several.
The senerio is you buy from a seller on a L/O and then sell to tenant/buyer on a L/O.
24 months have passed and no the tenant/buyer wants to exercise thier option to buy. What now? Do i have to take down the property with new finacing and then sell to the tenant/buyer in a week. (2 closing costs for me for 2 different closings? This sucks) and what about title seasoning? Will the new buyer’s mortgage company raise a issue because I ( as Seller) have only been on the deed for a week or so.
How are you seasoned L/O kings doing it.
Please don’t answer if you haven’t done a L/O deal. I’ve done numerous Sub to’s and flips ect. Just never done a L/O simply cause i never cared to, but now its a new adventure and want to do it right. Buy the way I have already got the house under contract on L/O. Just want to sell it right with out any BS in the end.
Thanks
It look like you are doing a flip on a L/O. It does not matter if you are on the deed one hour or one year. The question the mortgage company might raise is if you are not the only one on the deed.
It does matter how long I’m on deed to some lenders 90 seasoning. Trust me this is not my first deal. I’ve done over 50 flips ( buy, rehab and sell) but this is my first L/O (flip) if you wanna call it that. I need someone to respond that has done this type of deal. I know there’s one guy on here that does nothing but these deals but i can’t remember who he was.
If I’m understanding correctly, you did a sandwich LO and now your end T/B is ready to finance.
So, you aren’t on title, and you are needing to do a double closing, aka a “simultaneous close”.
Years ago it wasn’t as tricky, but with title companies and lenders being very CYA now, it is more difficult.
If you’ve done 50 plus deals, then you likely have a title company that is willing to work with you, so I would contact them first regarding a double closing to see if they insure or will do double closings.
The bigger hurdle now is will the buyers lender go for it, which you have no control over.
Since you’re buyer is ready to go (I assume) I would go to the title company first and see if they do double closings.
Then let the buyer follow thru on finance and then you would set up a closing with the seller at the same time at the title company.
if you hit a roadblock with the buyer’s lender, then you’ll have to go to a plan B.
Plan B is you can cloud title with a Memorandum of Option and let the buyer purchase from the seller, and you get your cut after close.
The goal here is to protect your cut from the seller, so you could take it a step further and also get a Promissory Note from the Seller, and also go to the closing, then follow the seller to the bank afterwards.
Unless you feel that the seller is a crooked SOB, which isn’t that uncommon, then I would go with plan B and make life easy.
Get with the seller and let him know your buyer is ready to close, and you all will draft a contract between the buyer and seller for the terms YOU HAVE IN PLACE with the buyer,…meaning…a higher sales price, the rent credits, closing costs etc, then you will get your cut from there.