two quick finance questions

Financing, Hard Money Lenders, Private Money
1

I guess finance is my next reading area since there are so many ways to do things. I had 2 questions though.

  1. Let’s assume I am about to buy a property where I will eventually qualify for a 80% LTV loan. To lower my down needed significantly, I would lower the purchase price right? So if the home was bought for say 92k but appraised at 100k, I would need 12k?

  2. How in the world are people getting checks when they buy a home? Just curious.

thanks

2

The LTV is usually computed on the sales price. I have researched this and found that (in Calif.) deep in the state code is a definition of how to compute the LTV and mortgage insurance requirement. At the time of the sale, the “value” is the sales price.

“getting checks at closing” can occur if you do a double closing whereby you had a lease option and then sold to another investor

3

YES,

you CAN GET CASH at closing on a purchase and it can be done legally and disclosed on the HUD 1 (settlement statement)

You just need to deal with a mortgage broker that knows what they are doing and also understands investing.

4

Some of the larger banks that I have worked with will not give cash back at closing, they have developed rules against it because of past abuses. A mortgage broker told me that you could form a corporation and have that corp get a check at closing. They just can pay the buyer. This is a brief discription of what I was told. Some more experienced Loan Reps will have more explicit details on this type of transaction. I know it can be done if they do a double close it can happen. I don’t know how many lenders do the double close?

NDI

5

Randy

you have to structure the deal right to get it there are a few ways to accomplish this and only a few ways.

You can’t just say to the lender I plan on getting cash out at the deal they will look at you and deny the loan at best.

It is all in how you write up the contract and the HUD 1

Yes double closings are not all what they are made up to be it is an OLD OLD guru trick that is very DATED and the way that I do it is very very UP TO DATE.

Plus, you do not have to do a CO refi either unless you want to it just cost more for closing cost again

6

The only point that i wanted to make is that it is NOT as easy to get cash back at closings like many of those guru’s make it out to be. You have to work with someone who has a history of making it happen.

NDI

7

thanks for the replies. I was not looking to do the cash out at closing thing. Just curious.

I want to get into a prop for 10% down BUT I can only get a 80% loan (hypothetically). If I want to pitch the owner carrying 10%, what % rate and term would you recommend?

10% should be 10k or less.

8

Evergreen what is your Fico score why are you saying only 80% do you have a fico below 580?

You might beable to do better

see this thread

http://www.reiclub.com/forums/index.php?board=26;action=display;threadid=4002