Found 100% Financing For Investment Property!
......But I'm turning it down. Since I am only on the deed and not the loan for our home, no mortg. lender shows up on my credit report. So this quick thinking mortg. broker told me to buy as many houses as possible in the next 60-90 days and he would push me through a different lender and closing attny. each time and get me 100% financing and lower int. rate as OWNER OCCUPIED! Says he's done it many times, the lenders never have time to audit because they close so many loans, and it wouldn't start showing on my credit report for 60-90 days. Though I must admit that my over anxiousness and extremely high motivation to get my first property was ready to jump all over it, I woke up the next morning, looked at my wife and two year old son and decided that I would like to continue doing so. Though I WILL build a large and profitable rei business, I don't want to get there, look back and remind myself that the foundation was built on fraud. Though I disagree with alot of b.s. lenders and banks call laws so they can try to be the only ones to get rich at this game, I will not allow myself to justify it by breaking those laws just because someone is willing to allow me to in order obtain a bunch of origination fees in a hurry to line their own pockets. Remember my name, because I believe I'm less than 30 days away from my first property, which I will aquire with the proper ethics, smoke a cigar, sleep peacefully, and not care if I am am that ONE person that gets audited tomorrow. Then it will be "Katy Bar The Door!" To be continued.......
Good for you LarryNut. I am in mortgage business. From time to time, we have to turn down investors who want to buy a NOO properties as a primary. I recommend for you not do any more business with this broker. It is not worth it to make money in an illegal way.
You really had me freaked out there for a second! Geez, recipe for disaster if I ever heard one. Glad you came to your senses, good luck - Zach
Good for you. We are all tempted just like you were for different reasons. I am sure you would rob a store for bread for your babies if they were starving as we all would. A pat on the back for not committing fraud. I too have been tempted to do things wrong like that. One night in jail was all it took to keep me on the straight and narrow. Crime does not pay. What you were going to do would have been a crime and just because you may never get caught does not make it less of a crime. Nobody will get hure is another way to think it may be OK to do something like that but it is still wrong. Keep up the great ethics and you will go far and be proud. Good luck
Ted Jr
Kudos to you for taking the high road.
J
Good post Larry. I think we all can learn something from this, because things that we do in the dark may very well come to the light, when least expected. Hang in there you will get there with your honor in tact.
What happens if you do own a house and the home was financed owner occupied but then discovered that real estate investing is a great business and then decide to rent your own house out and use it as a tool to build more assets. Would that be considered fraudulent? If so, is there a way around it? Please help cause I am seriously considering it.[ Edited by cmyke on Date 09/09/2003 ]
Harmless crime?
someone allways gets hurt. I have policy in place and wont stray from it. If I act on crime that wont hurt anyone , I'm moving in the wrong direction. That opens the door for more DANGEROUS behavior.
That works like the law of gravity.
If someone talked to one of those, doing 20 years for cut and paste morgage appraisals, investors I would bet they started out with harmless crime.
Good decision:
I am a mortgage broker myself and this is something I would not do, because I want to be a ble to sleep at night and not worry about the knock on the door.
I don't know how how good your credit is , but I know lenders that will lend up to 95% LTV for non-owner occupied properties. Also, if you can pick up bargain properties that need rehabbing, you could also obtain no money down investor financing. it woud work like this:
They will loan you up to 65% of the after rehab value of property. So for example if you are buying a house for $40,000 that needs $20,000 fo rehabbing. If this house has an after rehab value of $100,000, they will loan you up to $65,000 (includes closing costs and fees). They do however require decent credit, and reserves.
Good Luck!
As a mortgage broker, I know of a lender that will allow an investor to purchase up to NOO properties with 100% financing. However you must have a 680+ middle score. Other stips may apply.[ Edited by mortgagegirl on Date 10/15/2003 ]
Good job Nut!!
And to everyone: how comfortable are you with "due on sale clause" when buying/selling "subject to," etc.?
HB
Quote:
On 2003-09-09 16:01, hbrown10011 wrote:
Good job Nut!!
And to everyone: how comfortable are you with "due on sale clause" when buying/selling "subject to," etc.?
HB
LOL good call.
Just wanted to say thank you all for your interest and support in my post. Though I know in my heart that I'm doing the right thing, it's really helps to hear it from the professionals. I guess it will just make that first one that much sweeter. Thank you also to the mortgage brokers that have responded. I am in no way trying to stereo-type you and I hope that it wasn't taken that way. After all, I still need you!!!! Thanks again, Larry
hbrown10011 asked a good question.
based on all the warm forum hugs and electronic "kum ba ya" for LarryNut and his noble refusal, i take it that everyone agrees what he did was the correct thing in turning this opportunity down. i agree.
however, it does make me wonder what you all think about the defying the typical loan's DOS clause in sub2 deals. i seem to read lots of grand hurrahs for Locke's sub2 method. i've not tried it yet myself (rei newbie), but feel that it might be something i would like to do.
will doing sub2 deals allow me to sleep at night? should I be waiting for the knock on the door if I do it?
happy trails!
Kevin
Just had to post something in reference to buying houses with the big "Due on Sale Clause" I am doing it regular in VA and the bottom line is the Banks do not want the houses back. Use the proper paper work to protect yourself, don't personally sign for anything and Pay the mortgae on time.
They do not care for the most part and if they do have your exit ready with a buyer or mortgage broker. The Banks just want to get paid. So, go do it , make no promises and you'll be surprised at people signing there house to you.
Better yet send it to me and I'll take it
Good Luck,
Gil
On the matter of financing...what types of Lines of credit are available? My local bank wants me to put up a one year CD as collateral, which I dislike (the bank pays 1.25% CD interest, while I'm earning 5% to 9% on the funds I'd have to shift to the bank).
I have over 750K in liquid assets (stocks, bonds, mutual funds, etc) and a good paying "day job". Are there any entities that would give me a decent LOC without requiring me to deposit a CD with them?
Thanks.
Bob
I was in the same situation. Good for you for listening to your gut.
[addsig]
Good for you , LarryNut!
Here in Lansing, water bills (unlike gas bills, for instance) are appurtanant to the property. If there is an unpaid water bill, that will be a lein on the property just like an unpaid assessment. Here they have to be paid up before closing, either by the buyer or the seller.
If the bill is from before you took title to the property, I would say that it is the responsibility of your title insurance company to pay it off- after all, you paid them to check for any leins, and they insured you against any that they did not report.
However, if the bill is from after you took title, it is possible that a pipe burst on your side of the meter. I had a neighbor once who had a long run of pipe to his house from the meter, and one day a utility company crane put a brace down on the pipe and broke it. In the day or so it took him to notice the new pond forming in his pasture, several thousand dollars of water ran through the meter and he wound up having to pay for it. But if the water was turned off at the meter, this seems unlikely.
So I say, talk to your title insurance company.
Chris
Reading your post, it is clear that the usage is from after you took title. Sorry.
In Lansing, the sewer charge is three times the water charge. You should at least be able to argue that there was no way the wter went into the sewer system, and so you should only have to pay for the water.
Good luck!
Chris
To see if there is a leak in the supply line between the meter and the house simply turn off the main water supply valve in the house, or be sure ALL water usage points are off, and see if the meter is still turning.
Supply line leaks are more common than you would think and sometimes cannot be detected above ground.
Jim