I have an accepted offer on a bank owned property to purchase for $57,500. The house is gutted.
I am approved for a construction loan to rehab. I would then put a mortgage on it to rent out the house…
Another investor came to look at the house and I happened to be there at the time. He offered to buy the house from me for $68,500 as-is.
Great! The guy is on the up and up. He is fully funded with a line-of-credit.
Our lawyers and realtors are all at odds with how to make this deal work. Here is why:
If I am going to immediately resell the house, it isn’t right for me to originate a construction loan just to resell the house. (I don’t even know if I can) Therefore my buyer is completely willing to fund me (act as my bank) for me to purchase the home, and then I could sell it to him.
We are getting different stories everywhere. Lawyers can’t agree on how to do this and title companies are telling us that even though I can go through my closing with money that I borrow from him, that he then has to give me the full purchase price at another closing (instead of just hte 11k difference).
I am in the state of Michigan. We all want to do what is ethical and legal here,
Why can’t our original plan for him to lend me money on a promissary note for me to purchase the house and then Quit Claim the house to his LLC?
Are their anti-fraud measures at work preventing this??
I really need to either get a plan together or abandon this altogether by this Monday, so if any seasoned loan officers or investors are out there, please give me some advice.
thanks