Need Help Fast

I have a contract on my first property which I intend to flip or rent if I cannot sell. It is an REO and I need to figure out financing. I am trying to get cash from the property. The contract is for 63K and it will appraise around 90K right now.

I am wondering if I can assign the contract to my father or one of my company’s to do the initial purchase and then write a contract between my father or company and myself at a higher price like 90k so that I can get financed at a higher price and get the extra money through a gift of equity. That way I can finance the property at 80% and still have around 10K extra for repairs and holding costs. Can I finance as a OO since I am getting ready to sell my primary residence.

Is this possible and how would it work. If not, is there another way to accomplish this. Can we close both deals at the same time or close to each other.

I also have committed to a closing date on my initial offer that I may not be able to make. Are banks forgiving on closing at a later date than originally agreed.

I’ve been researching lenders that will payout on assignments and to date have not found one. Does appear that would work unless you use a hard money lender that does not care about the assignment.

You opening statement was that you intend to flip or rent the property. If you financed as an owner occupied with the intent above then you would be committing loan fraud. I know thats not your intent, but just thought I’d mention it. Because you would not own an owner occ. property does not mean that this would qualify for owner occ.

I think I’ve sent you a couple ideas on how to get this done but it appears you were not interested. My thoughts, again, were to use a hard money lender (quick/easy) to fund your purchase. Would pay around 4pts + title/misc.

Immediately after closing, do a cash out refinance up to 90%. (this should work depending on your credit)

I apologize if I did not respond to previous recommendations. I am definitely not intending to commit loan fraud. I thought it might work because I will be staying there once primary residence is sold until rehab is finished.

What is the best way to go about finding hard money lenders? Because this is first project I was trying to go through a lender until I feel more comfortable.

As far as a closing date. Are banks willing to work with that date or does it have to be by the original date agreed upon? Any thoughts.


I’m sending you an email that may help, so check your Inbox when you get a chance.

Good luck.

Steve R.

Actually, no need for apologies. I think maybe I was incorrect with my statement. There is actually another Buckeye on the board whom I believe has a similar situation. It looks like he also responded to you.

If you intended to live in the home while fixing it up then that should be ok. However, a lot of lender guidelines state that you must plan on living in the property for up to 1 year in order for it to get finaning and rates for owner occ. But who can ever say how long they will be anyware. You would probably be ok.

As far as HML, most will not do do owner occ. properties.

Thanks for the help. Hopefully it goes through. Its being inspected today.

If you plan to flip it, why not just sell your contract to one of those “we buy houses” investors?

That way you won’t have to actually purchase the property, so you won’t take out a loan at all.

If the as-is value right now is 90K, after the repairs are made, it might sell for maybe 130K (I’m guessing) That’s almost 70K in potential equity-- depending on how much repairs are needed.

The other investor would probably buy your contract for 15K.

Those guys close in 5 days or less!

As far as selling the contract… Can you sell the contract before you close? meaning if you have a low credit score and can’t get a loan, can you still agree to purchase the house and sell the contract to one of those “we buy houses” companies? If so, how does that work exactly?

all contracts are assignable.

You would need to put in under option-- and then sell your option to the other investor instead of taking out a loan to actually go thru with the sale.

I’m not a real expert. I’ve been reading books about real estate investing.

You should contact one of those “we buy houses” investors and explain your situation to them. Run your numbers by them, tell them what kind of shape your property is in and ask for a ball-park figure-- how much they would give you for your contract.

You didn’t actually buy the property yet, right?

Your deal sounds excellent. The deal structure is simple for your goal. A few things need adjusted with the price and 100% finance is available to get the deal done so that you can get the capital that you want I would recommend a 1st position secured line so that you only pay on the money you draw during the renovation period. You can also do this on a no appraisal finance, no doc. depends on credit.