Flipping Question
I am working on my first property.
The seller is asking $80,000. The
property was appraised for $130,000.
I have a buyer that is willing to pay
$120,000. how do I structure this deal.
The buyer is approved for a mortgage.
Do I have to come up with the money
out of my pocket to pay the seller?
Please HELP! :-?
sounds like a sweet deal I would use hard money to buy it they uselly can close quick and sell it right away will cost u about 6 k by u got the room to play with Good luck
by the way the do 65% fmv
Looks to me like you should be able to pull off a double close. You'll need to locate a local attorney or better a larger title company that can close the transactions fro you - someone with the experience and understand the transaction. They'll help you reserve 2 rooms and you should be all set.
Start reading-up on double closes and you should be able to pull it off.
I agree w/ Feltman and have the resources if you need assistance. Good luck
Congrats!
You have three options.
1. Assign your contract. This is your best and cleanest option. However, you must have an assignable contract or your seller must agree to the assignment. Also, your buyer will know the terms of your contract and may resent you making 40k in the deal.
2. Double Close. This is your most realistic option. You don't have to worry about your ability to assign or your buyer knowing your terms. The only reason that this is less desirable then an assignment is that you will be in the chain of title and there are some added cost. Also, the logistics and timing can be a problem.
3. Cash the seller out. Your least disrable option. You have to have the ability to come up with the cash. If your buyer walks you then have a property that you have to do something with. Make sure that it is a deal that you would do even if you did not have a buyer on the hook.
From my experience with all three options: Make sure you have enough time left on your contract in the event something goes wrong, it always does. Assignments and double closes are hard to pull off unless you have the ability and the willingness to close the deal. Therefore, always have a plan to close the deal by yourself.
Thanks for the advice.
Don't be surprised if the lender says no to this transaction. They may have a problem with the amount you are making in the deal. Also, some lenders have title seasoning requirements.
Although a double close is most straight forward, it may limit your end buyer on the type of financing they can obtain.
Some lenders require title seasoning, which in a nutshell means that the same owner must have owned the property for 12 months (generally). You'll have to direct your buyer to a good mortgage broker to help them find a company that has no problem with this.
Do you need to pay cash for this property? Is there a mortgage you can take sub2? Another option is to buy the property and then sell it on contract to your buyer with a 1.5 year balloon or such.
I would probably try to work a double close. This is a GREAT deal! GOOD LUCK
I am kind of new.
To help with the closing, can one use an escrow company?
What the exact role of attorney and title co. in closing the deal? I know that attorney must review the contract for legality. Any other helpful detiails.
Thanks
You should only do the deal if the buyer can bring all cash to close. If not they may be trying to wholesale your good deal. If they can't close in 10 or 15 days with all cash then they can't close.
James,
In most places outside of www.So.Cal., title co's. and attorneys are used the same way that we use escrow companys.
Di
pspiers,
How do you handle the seasoning requirement on Option #2? How many of these have you done recently?
JohnCl
I have found a property and the seller wants 75k and the appraised value is $105k. I have a buyer wanting to purchase it for 90k.
How do I set it up so a check is written to me/my company at closing for the $15k?
I read on this site to open an escrow account with an assignment and I could close on behalf of the buyer. Could someone please detail me the process regarding this option specifically how to get paid at the closing table instead of the buyer giving cash upfront?
1)Doesn't the buyer have to be there at closing to sign all the paperwork from the lender since the loan is in the buyers name?
2) Can 2 seperate checks be cut, one to my company and one to the seller if I open an escrow account?
Please someone walk me through this step , or any other idea, step by step because I am looking to stop requesting the seller to sign an addendun signing any thing over thier asking price to me then taking them to the bank to cash check and receive my amount over the asking price.
I am looking to legitimize and pay taxes and relieve myself of that extra headache gragging the seller to the bank; it is getting harder for them to cough up that money.
Bottomline, I am trying to have a check cut to my company at closing; how can I accomplish that legally?
Thanks in advance for any and all assistance...
Alexis:
Here is another solution that has worked well for me. Why dont you wholesale it to your new buyer. You could collect $3k-$10k on the front-end, draw up a 2nd Trust Deed for the balance owed, assign your contract to new buyer. Then after they close, you can record your 2nd Trust Deed on the property. Then have you new buyer refinance and pay you off!
Or sit-back and collect interest on your money until they do refinance....
Best Riches,
Jeff Adam
[addsig]
Alexis, best of luck with the deal and if you don't mind I'd love to know the outcome.