Posted by James Strange on December 19, 2002 at 02:14:29:
You need to find out what the max CLTV is that you are approved for.
A flip is legal an inflated appraisal is not. If your buddy is going to give you cash back at closing it has to be disclosed to the lender. Guess what the lender will not like this. Not telling the lender about this sellers concession is illegal. (it gets done but it is not legal)
Now your buddy can buy the property and sell it to you and carry a note for 20%. As long as it is disclosed it is legal and every one is happy.
Posted by christopher on December 18, 2002 at 22:56:15:
I am wanting to get in the real estate business. I am about to buy my first home and want to make it a duplex. My credit is not that good but have been approved for a 75% loan (wow!)and will need owner to take back a second of 20% and put 5% down from my own funds. What I am needing to know is, could I have a buddy put a contract on the house after negotiating the price that is right for me, then turn right around and buy the home from him for the appraised value with him giving me the cash back after closing so that I may beautify the property. I hear a lot of people here in St. Louis saying that this is a flip and just cant be done however I really dont want to accept this. Can anyone give sum advice on how to handle this situation.
Re: Can this deal be done. - Posted by michaela-ATL
Posted by michaela-ATL on December 19, 2002 at 07:52:01:
christopher,
there are renovation loans available, that will give you 95% of purchase and rehab money. a 203k loan for example. talk to some lenders and ask them about the prducts they have available. don’t let them pull your credit report, though, unless you’re sure who you’re going with. you do want to know your middle score (the middle of all 3 credit bureau’s scores).