Cash at Closing - Posted by Richard J

Posted by Ben (OH) on February 10, 2003 at 07:58:15:

Where can you find a bank to do this?

Cash at Closing - Posted by Richard J

Posted by Richard J on February 07, 2003 at 22:02:27:

I do not quit understand how is it that you can get money at closing when purchasing a home. Can someone explain that to me?


Re: Cash at Closing - Posted by Chris - Fl

Posted by Chris - Fl on February 08, 2003 at 21:34:17:

Seller owes 90K
home worth 100K
costs to sell 15K
Seller “upside down” if he sold through a Realtor 5K

Investor buys the home sub to
ask seller for $2500 cash since you’re doing him a favor of taking his owner financed property off his hands!

This is the “pretty house” way to get cash at closing!

Not to mention if you get a t/b with 3-5% down to L/P the property from you…


Re: Cash at Closing - Posted by JoeS

Posted by JoeS on February 08, 2003 at 17:59:42:

This is my take on your question. Bear in mind that I am not a “guru” but a fellow investor with 8 years of experience, doing mainly rehabs.

When I buy a property with whatever method of finance, I realize that there is just so much profit in a property, period. If I buy for say $40,000, do some rehab and attain a market value of $80,000, there is a potential profit of $40,000 minus rehab costs, expenses and holding costs.

Let’s say that I bought the place with seller financing for $40K. I then rehab it and refinance it thus paying off the underlying private mortgage. I would have received 80% or $64K upon refinancing. Paying off the loan leaves me with 24K, more or less;this is the “cash back at closing” that the TV people speak of.

Is it wise to do that? Depends. If you can use that 24K to reinvest into other income producing properties, then maybe it is. However…the infomercial makes it sound like this is “spendable cash”. Remember…if you spend it wisely or foolishly you still have to pay it back.

I realize that many investors make a lot of money doing this. But, I do not because the area that I live in does not lend itself to that type of investing. The tenants would only destroy the house, walk away and move into another one, repeating their “search and destroy” mission! E-mail me if you have any more questions…I would be glad to help.

Question for clarification - Posted by Kenton

Posted by Kenton on February 08, 2003 at 15:13:47:

Is anyone indicating you can buy a property below market with one loan for the acquisition to be followed by another the same day to pull cash out?

Or are we talking about a refinance on a different date to pull cash out?

Re: Cash at Closing - Posted by GL(ON)

Posted by GL(ON) on February 08, 2003 at 08:12:03:

Basically you borrow more than the property costs you.If your credit rating is high enough this is not hard to do.

But remember what you borrow you have to pay back, and make payments on in the meantime. So it’s not exactly “free” money. The only kind of debt that is good for you is the kind that makes more money than it costs, like well selected real estate.

Re: Cash at Closing - Posted by Marcus Myles

Posted by Marcus Myles on February 08, 2003 at 06:19:14:

You can have a fixer upper or negotiate a sale price well below appraisal value. Attain a new mortage (80-90% LTV) large enough to satisfy the 1st mortgage, and other pertinent expense, and the remaining funds will be disbursed to you.

Re: Cash at Closing - Posted by Don Dion

Posted by Don Dion on February 08, 2003 at 03:27:43:

Purchase an REO from a bank that needs work. You can get a check at closing for the amount you will need for the rehab and possibly work out the terms of the loan so you have 14 months to do the work and refi the property. You will need 12 months to get the appraised value based on the debt service in place at the time. But it is possible to walk away from the second closing with cash out also.

Re: Cash at Closing - Posted by Clair-MO

Posted by Clair-MO on February 07, 2003 at 22:40:56:

RJ, Buy low and refinance high is one technique to get cash out at closing.

Re: Question for clarification - Posted by M. Martin

Posted by M. Martin on February 09, 2003 at 13:36:19:


I have done it at same closing and I have done them with a three day gap. Find properties at around 60% of ARV and borrow 80% of ARV. It is a no seasoning refi. With good credit and the right properties it is easy.