need financing advice quickly

Financing, Hard Money Lenders, Private Money
1

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

2

Why not just asign him the contract and pocket the difference?

3

sorry, I forgot to mention that my agreement with the bank who currently owns is not assignable, and they have related to me that they are unwilling to budge on that.

4

If the other guy will act as the bank then just have him show up at closing with the funds to close and a second check for what he is paying you. Have the title company draw up a warranty deed at closing adding him to the title immediately after the closing. Once the deed is recorded you just draw up another document deeding him your interest in the property. The all you do is file it with your county clerk and walk away with your money.