Can't Get Reasonable Financing....
I posted this in the rehab forum as well.
Maybe someone here will have some input.
Here's the skinny.
3/1/1 SFH brick, large yard.
Price: $50,000
Tax Assessor Office: listed at $63,000
Needs: $9000 (carpet,vinyl,paint,Central AC)
ARV: $72500
Looking to hold on for rental income.
Payment on 59,000 for interest only loan
would come to about $400 or so. Could easily rent for $600-$650.
Problem is that everybody wants %10 down or high 700's FICO with 35% Ratios.
The mortgage broker that we are using is with Carteret Mortgage.
We do have another letter of preapproval for the $50,000 with $0 down but then we would have to come up with the repairs ourselves. That would be like 6 of one or half dozen of another.
The property is just outside of Lubbock, TX.
What would ya'll do in this situation?
Hate to completely walk away from this.
Even if we just get an assignment fee out of it.
Thanks,
kevlp
Why don't you get hard money for this? Yes, it sucks to pay the points but on the good side, once you're done you can refinance $63K (90%) through Carteret.
Just be sure your broker has access to banks with no or short seasoning.
What would the property appraise for currently?
If it will appraise high, here is a trick:
Have your company or preferably a trust make an offer to buy the property for your $50k. Now you personally or whoever the final purchasing entity makes an offer to buy the property for the full appraised value. The loan is based off this new value.
lets say that it will appraise at $65k. You bring $6500+closing costs to the table temporarily. You double close with "yourself" and the 1st entity receives $15k profit which gives you your down payment, closing costs, and part of your rehab.
A trust is best because the trustee is the one who will sign the middleman paperwork. It causes questions to be asked if you are signing for everything.