Posted by Todd (AZ) on December 08, 2006 at 09:26:27:
Brandon,
I don’t know what comments you are expecting me to make. It has
been a few years since I have worked with a lender, but I regularly
pulled some cash out at closing on deals. All done on the up and up,
full disclosure to lender.
You have never heard of this being done? Are you serious?
I feel like I’ve just landed on a different planet here. Everyone saying
that conventional lenders won’t give credits back at closing, or lend
based on value versus only on purchase price. Am I missing something
here? Are we talking about the same thing?
Where is the money coming from? - Posted by GL(ON)
Posted by GL(ON) on December 07, 2006 at 16:05:51:
You say you are paying $387,000 for the property and want to take out $75,000 at closing. To do that you need to borrow $462,000 but you do not tell us who you are borrowing it from or how.
There are ways to do this, too many to list here. Once you figure out what you want to do the title company should be able to figure out how to do it.
Posted by Brandon on December 07, 2006 at 13:17:05:
What kind of financing are you planning on getting? Conventional? If thats the case, then this is not going to happen.
It’s a common misconception. And, you’ll see this addressed over and over on this board. That just because you can buy a property for less than market value does not mean you can get cash back at closing. A bank will lend at the lower of either the purchase price or appraised value. So, in your case, if the comps are true, you should have no problem getting 100% of the $387k if your credit is good. But, getting the fix-up money if another story. Do a search of the archives to find how some people do this.
Brandon, That’s the point…I have researched I just want to find the best possible scenario. Whether its a note placed against the property paid at closing or having the property placed into trust with me as a beneficiary. I realize the lender won’t lend the additional money unless its done creatively (legally). Just want to know how to have the title company do it. Thanks for your inpurt.
Posted by Todd (AZ) on December 07, 2006 at 14:06:28:
Can’t do it? Since when? I have bought many properties over the years
using convential lenders, and many times pulled cash out of the deal at
closing. As long as the lender is aware of it, and they are ok with it,
there is no problem. You only run into trouble when you try to do it
under the table - that’s called defrauding a lender.
As far as the title company, I’m not sure what your question is or what
you are trying to accomplish, it is just proceeds out of the loan. You
will owe the loan you take out, what you get back is just a credit back
from the seller.
Posted by Brandon on December 08, 2006 at 08:59:10:
Todd,
I’m very interested in how this is possible. I’ve never heard of anybody being able to do this with conventional lenders.
Granted, I too have been able to get 1%-3% credits (or cash) at closing. But, in the poster’s case:
75K Cash Back to me at closing for repairs/instant equity
This would seem impossible to me.
Conventional lenders with conventional mortgages, not rehab loans, hard money or lines of credit, always lend on the lower of the purchase price or appraised value.