you could have him agree to a seller concession where he price could be increase (6% max0 to cover your expenses.
All you have is the sellers word and that will not obligate him to give you back anything! the bank would probably look at this as fraud.
a better way to work the deal might be to purchase it for 72k and take out heloc for the 40k inequity that could be used for another property and/ or rehabing the subject property AND YOU GET THE TAX BREAK
W hat you are suggesting is called lending fraud -- and the penalties are harsh.
I know people do this all the time, with some sort of agreement outside of escrow. But if it’s not disclosed on the HUD1, you are running a risk.
As you may well know, there are lenders that will go to 100% on investment property. But it will be based on the lesser of the appraised value or the selling price.
And as suggested, you could ask for seller concession. But check what your lender will allow first. A lot will only allow 2%-3%, and that can only be for non-recurring closing costs – not cash to you.
If you’re going to rehab the property and hold it for a while, there are lenders (not hard money) who will lend 100% of the purchase and 100% of repair costs, and base it on the ARV. Unfortunately, I don’t know any that will do this in NY.
Just remember, any deal you and the seller make that’s not disclosed can be construed as fraud.
What is the point of even telling the seller? Shoot sign the deal sell the home w/ no money into the property and take your cut. do a 1031 and you have yourself a good down payment for the next 2 family you find. Helps you with cash flow too.
As willkatz said, YES. Even though this approach would be disclosed on the HUD1, it could still be considered fraud.
I think you’re best off just getting into the property and then (as suggested) just pull some cash out via a HELOCA, REFI, etc. It may cost a little more, but a lot less than defending a fraud case.
If your credit is good, you can get a 100% financing. And as also previously suggested, you can get the seller to pay your closing costs. Which would get you in with nothing out of pocket.
you could have him agree to a seller concession where he price could be increase (6% max0 to cover your expenses.
All you have is the sellers word and that will not obligate him to give you back anything! the bank would probably look at this as fraud.
a better way to work the deal might be to purchase it for 72k and take out heloc for the 40k inequity that could be used for another property and/ or rehabing the subject property AND YOU GET THE TAX BREAK
GOOD LUCK
Greetings billyblack,
W hat you are suggesting is called lending fraud -- and the penalties are harsh.
I know people do this all the time, with some sort of agreement outside of escrow. But if it’s not disclosed on the HUD1, you are running a risk.
As you may well know, there are lenders that will go to 100% on investment property. But it will be based on the lesser of the appraised value or the selling price.
And as suggested, you could ask for seller concession. But check what your lender will allow first. A lot will only allow 2%-3%, and that can only be for non-recurring closing costs – not cash to you.
If you’re going to rehab the property and hold it for a while, there are lenders (not hard money) who will lend 100% of the purchase and 100% of repair costs, and base it on the ARV. Unfortunately, I don’t know any that will do this in NY.
Just remember, any deal you and the seller make that’s not disclosed can be construed as fraud.
Yes.
What is the point of even telling the seller? Shoot sign the deal sell the home w/ no money into the property and take your cut. do a 1031 and you have yourself a good down payment for the next 2 family you find. Helps you with cash flow too.
Hope it all works out. =)
Billyblack
As willkatz said, YES. Even though this approach would be disclosed on the HUD1, it could still be considered fraud.
I think you’re best off just getting into the property and then (as suggested) just pull some cash out via a HELOCA, REFI, etc. It may cost a little more, but a lot less than defending a fraud case.
If your credit is good, you can get a 100% financing. And as also previously suggested, you can get the seller to pay your closing costs. Which would get you in with nothing out of pocket.