Im new to the forum and new to investing. I have learned so much over the last year. Unfortunaly early last year i jumped on a preconstruction single Family home in Tampa. Well to make a long story short my loan wasnt the best nor did the house appreciate at all in 8 months. My appraisal was what i bought the house for. In any case i would like to get out of the contract and get my deposit back. I dont think this is really possible but was hoping if someone had a clever way of getting out. My contract states they will not refund the deposit even if i cant meet my loan conditions or have buyers remorse. Only the address was wrong on my contract of what house it was and they sent an amendment to fix it. I have not signed the amendment yet hoping that would be enough to get out. But looking at the contract its states that even graphical errors does not default the contract.
Any ideas? Thanks all.
How do you know it did not appreciate?
What was your plan for this property after you buy it?
How much is your deposit? Can you afford to walk away and forfeit your deposit?
My original plan was to keep it and have my mother move in. I would pull the equity from it and reinvest. She didnt want to move in so i decided buy and hold it while renting it out. My deposit was 12k and i signed the contract before she decieded not to move in. It would be sad to see the money go. My loan would not allow me to pull equity for 3 years without a 5 percent penalty on 240k. I cant believe it never moved in such an area like Tampa.
Why not stick with your hold for rent plan?
Hold for three years, then sell after the prepayment penalty period is over. You should see sufficient appreciation in three years.
But looking at the contract its states that even graphical errors does not default the contract.
That is why contracts exist. For the security and protection of investment for BOTH parties. It is unfortunate that your plans are going awry. If things were going the other way for you I am sure that you would not want the seller to back out.
It is all about risks.
Don’t you still have time to find another loan program, even another lender?
I just went with a new lender and now my instrest rate slightly increased. I am now pushing to just close on the house and hope for the best. Total cost to close is 13k. That seemed a little much to close on a 239k home.
I dont know why the house didnt build any equity over the last 10 months. My only guess is the market is over saturated? I know lots of builders came to tampa to supply the demand for housing so this could be why?
Total cost to close is 13k. That seemed a little much to close on a 239k home.
Unfortunately, Florida kills you with taxes/title costs. It is one of the highest closing cost states. Look over your Good Faith Estimate and see where all the money is going.
You may be able to “trim” some.
My lesson in pre-construction is to always get your own attorney to review the contract. Have them change it so it’s more reasonable since most of them absolutely suck for the buyer. If they refuse, then you just walk away.
It was a very expensive lesson.
Why not enlist the help of another investor in your area. I would love to help you if I was there.
Option 1) Lease it to another investor with an option to buy it in 3 to 4 years. Option could not be exercised in less than 3 years with out a 5% penalty. They could sub lease it (or rent) to make the payments. Your option fee could be as much as 15k.
Option 2) Sell the property using a land trust to make the payments on a 3 to 4 year schedule. New owner agrees to refinance at that time.
It could be very possible to get your down payment back and even get a small monthly spread on the payments for 3 years. Just a small bonus.