Trying To Stay Motivated
I am supposed to close on a property that i was going to rent through hud. The seller is willing to hold a second mortgage so i can get w/little money down (i pay some prepaids). I went out yesterday for a final walkthrough with my new knowledge of hud inspection. Come to find out, there is going to be 2k-3k to get this up to hud standards. The contract for purchase has alread expired due to the lender delay. I was so pumped seeing i was getting calls last week from hud tenants asking for availibility. Originally the seller was looking out for me a property that is already hud qualified w/tenant,but this one came across that was completed(vacant). I was thinking of letting him know tomorrow that after inspecting via hud check list, i don't have the backings to bring it up to hud standards. The seller admits never taking a house through hud initial inspection. Should i cut my losses and move on ($500 binder + $300 appr.)? If i would fix it up, i would rather just take a rehab project and use a hardmoney lender i know. any thoughts would be appreciated.
HUD standards tend to be the bare minimum for safe housing, so I don't understand what the problem is. Write up an ammendment to the contract and require the seller to complete repairs prior to closing, deeming them necessary for occupancy. If he is reasonable, there should be no issue since he will more than likely need to complete these repairs prior to selling the home to anyone.
-Chris
p.s. Why didn't this turn up when you had the property inspected?
[addsig]
good thing is the contract has expired and i have a cash buyer that is interested.. which i'll charge the seller $500 for referring him (get my deposit back). To be honest, i didn't realize the extent of the repairs until i went to the hud workshop and had a contractor out there that deals with hud. Basically, the initial rehab was done incorrectly ( painting over old paint and rotten wood, not replacing windows, doors, all in all ,just poor craftmenship). After talking w/the contractor, sounds like the seller can't afford to put any more repairs (undoing what the old contractor did and start from scratch). but now i got a better understanding what to look for when buying a wholesale that is ready to rent. I told the seller i initially wanted a turnkey (tenant occupied/hud approved) at wholesale. if anything, i learned quiet a lot, especially...when ever i do rehab, to do it right from the beginning.
speaking of which, when you get a wholesale thats already been rehabbed. What should the condition of the house be? i'm guessing pretty much condition for retail just the seller is making a quicker sell as wholesale. I know it doesn't supposed to be perfect, like a new house.
This good. I did walk from this deal, but the mortgage broker is claiming to take to small claims to get the 1900 for title order. basic rundown
contract between seller and I, signed on 4/3 and was to closed within 20 days. My application is dated on 4/12. The underwriting took weeks before it hit title. The good faith estimate i recieved was dated 4/28. So due the lender's underwriting the contract expired. Plus the broker claimed that the contract between the seller and i is seperate than the contract between the broker and I. Since when is a loan application a contract stating that i will pay the pre paids when the original contract is expired due to the lender??? plus, i thought that is due at closing, but wait, can't close on an expired contract.
That was my rollercoaster week.
Did you have a clause in your contract basically stating that the contract is "subject to" you receiving some kind of financing?
This clause is in a basic RE contract but blank to allow the buyer to fill in.
Relax,
A mortgage broker doesn't get paid in Florida until YOU sign the papers. This is from experience of doing deals in Florida, I am licensed there. So don't worry. Any Broker that is telling you to close or pay them is not who you should be using.
Next,
I would rather buy a run down house that I can gut, remodel, fix, repair, ect.. Than one that is halfway decent. I have seen many people buy "rentals" that were headaches.
Well now you are out of that deal, look for the next one, and think of all the experience you received.
Good Luck
Lori
[addsig]
I went over the contract, and its straight foward to close in 20 days unless extended by title,taxes,survey,convenants. Well, the underwriter didn't even look at it until after 20 days.
The seller did try reinforce the fact of cash at closing, but i agree with tinman1755, if i was going to do that, i would rather get a rehab where i can get a loan through my hardmoney lender and make sure its down RIGHT. I try to explain to the mortgage broker and seller that there is a difference than buying this house when rehabbed correctly (not perfect), than getting getting a SET amount cash at closing to fix OBVIOUS repairs (who knows what else). I'm finding out quickly who to work with and who to not.