deeding on to a property
I am currently working with a small time builder who is in default with his new construction. The house is valued at $625,000 and he owes $400,000 on it. He wants to liquidate it for $425,000.
My question is: If I get quit-claimed onto the property...How should I structure this deal. What I mean is should I structure as a refinance (so I don't have to come with any out of pocket expenses), or should I treat it as a 68% loan to value purchase???
The lender I work with, my personal banker, says that I can treat it as either/or, but he thought there might be a title company issue with it, since it is a brand new house.
I need a Sinsai to help this grasshopper out. Thanks!!!!
Kenishiwan GrassHopper:
Dom Mori Goto!!!
YOu merely need to have this builder to place the home's title into a Simple Land Trust.
Then have him to execute a Beneficiary Agreement to grant you 100% interest upon you (now as a co-benficiary of the Trust) successfully refinancing the home to pay off the $425K defaulted debt.
This should help you AVOID SEASONING ISSUES with the Title Co. and LENDER(it doesn't sound like your banker friend is telling you the right thing.)
I am a licensed mortgage banker(inactive license) and if you brought this deal with a quit claim I'd send you and your builder packing with a REJECTION letter in point to seconds!
Just kidding but if I gave you the above advice as an Actively licensed MB--then I'd have HUD, RESPA and all 50 State agencies coming at me like an outta control freight train + some jail time for me to marinate in all of my illict crazy creative REI ways!
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Sensai, Is this a Land Trust that I should set up to execute this transaction??? If so, can I use my Bronchick software to execute it?? Anything else I should look for??? Thanks....
Grasshopper
How complete is the home?
You may have to get short term financing like a construction loan and finish the house. Before you can put permeate financing in place.
Why would you want to get quit-claimed onto property that is in default?
You need to contact a loan broker who knows what he is doing and move fast or walk away.
As for LTV the LTV is appraised value or purchase price which ever is lower. So for lending your LTV would be 100%.
The home is 100% complete. I would just like to take out about 50k to finish up the basement and add some things to the house, thus a refinance would better suit me.
Also, I own a mortgage company, so finding a lender is not hard, I just want to know how to structure the loan. Thanks for the reply
Even if you quit-claimed onto the title for a normal mortgage you will still have to deal with seasoning on title. I am sure that you know that some lenders will look at that. But for a cash out refi the rates may be worse than hard money.
So that gets us to something that may work.
Hard Money should let you cash out to 75% LTV (real LTV not based on purchase)
After a few months on title refi with a conventional lender.
Is this a cheap way to go? No but it may work.
I am working on getting my brokers license and I would like to talk to you about the business. If you would like to talk about it send me an email.
DOLPH:
Sorry about the delay!
Yesi GrassHopper get thy Trust sign in the name of the Builder with you as a co-Beneficiary---Offer an Investor or go back to your lender to see it he can structure the loan with YOU as the responsible party guaranteeing re-payment.
If he needs for the Title to be taken out of Trust then your deal is killed due to seasoning.
(This isn't a problem is you use another investor who'd like a 14%-20% return on the money for $50K.)
However you can goto: GreenPoint or Countrywide for a loan on property whose Title is in the name of a Trust.
Also Lehman Brothers offers loans of this type(Trust Property) for their High-Value Luxury and Super Jumbo Mortgage Properties!
Email me and I can get you a referral or correspondence!
Derrick Ali
Money2LendU@loanProz.com
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