Financing For Dupleses
I posted a question earlier about loans under $50,000.
I currently have four properties under contract. Each is under the $50k mark. I discussed with local bank and because I am doing a stated or no doc loan the amounts need to be $40k loan amount each. My questions are:
1. can contracts be rewritten and prices increased with repair clause in them.
2. One property is $25k. can I ask seller to carry with 10% down and refi to pay it off, at the appraised value.
two properties are generating 900 gross per month. the 25k will gross $600. other property is a fixer, but with $10-15k put into it, realtor says should appraise for 60k. currently contract is for 35k.
thanks you for your help.
larry
1. Yes, contracts can be rewritten, or AMENDED is the proper term, to include repairs and such , what ever you and the seller decide and agree on can be written into the contract. But beware if it's in the contract, you will have to provide proof that the repairs are complete, or ask for a escrow hold back for repairs after the close of escrow.
2. yes you can ask the seller to carry with 10% down, and refi to pay it off. But, Beware you want to set this up so that you have a full 12 months of ownership interest in the property before you refinance the property or else you will be dealng with seasoning issues at the lender. 95 % of the lenders out there want you to own the home for 12 months in order to refinance at the current appraised value., otherwise you will have to use your purchase price as your value. Remember, if the house appraises at 100,000 and the seller closes escrow with you at a purchase price of 70,000
then the lender uses the 70,000 as your value, not 100,000. If your purchase contract says you paid 70,000 for the home, and you decide to refi it in 6 months you must find a lender that has no seasoning requirements to use a new appraisal value. Good luck.
thank you for your info.
I have another ?
on an escrow hold back, will funds be released as work is complete. also what if part of work is done by myself. will they ok.
also what about rehab loans. can purchase price be 35k with additional 10-15k for rehab.
thank you
larry
yes work is psid out of escrow when it is complete. Most lenders let the homeowner do work themselves if they have a licensed contractor oversee and sign off on projects as they are completed.
Rehab loans will allow for repairs to be added to the purchase price, but the work must be estimated and done by a licensed contractor, and the house needs to appraise high enough to cover the repairs. You don't want to buy a home for 60,000 that needs 20,000 in repairs if it will only appraise at 75,000.
Do your Homework, make sure you make a profit.