Posted by Rook (FL) on October 13, 2004 at 12:04:21:
I might have overstepped my bounds here because I’m very new to REI, but I’ll try to answer to the best of my abilities. The answer is…depends! Isn’t that a great answer? I’m sure there are a lot of lenders out there that would have no problem with this. You just need to find a broker that is used to dealing with assignable contracts and has lenders that are ok with it. Having said that the bank I work for won’t touch an assignable contract, but againg it depends on the lender you go to because who I work for is not very investor friendly. If you are putting yourself in the Buyer B position I might look for a better deal than your example. You still have a lot of expenses you are missing like holding costs, closing costs, rehab…etc. Hope my small amount of knowledge helps out a little bit.
Found Dream home approved 90% and broke. - Posted by D Sherman
Posted by D Sherman on October 05, 2004 at 13:58:52:
Found my dream home its a for sale by owner asking 78,000 somewhat firm but im stuck on the down payment and closing cost. Seller just wants his 78,000 and is not to excited about carrying anything. I cant refinance my ownly rental property for at least 2 more months but the only way to do this is know because the seller doesnt want to move in winter. Im recently self employed less than a year so Ive been approved for 90% no stated income loan but dont have rich uncle for down payment. any creative ideas are very appreciated to get the juices flowing.
Check with your bank to see if they will go for this:
Use the seller’s desire to move before winter as your down payment. Inflate the price to 86750 with the condition that the seller will pay your down payment of 8675 IF you can close before, say October 31. You also, of course, make your offer conditional upon obtaining financing, which you can not do IF seller doesn’t pay your down payment.
Re: Found Dream home approved 90% and broke. - Posted by Rook (FL)
Posted by Rook (FL) on October 12, 2004 at 10:04:08:
I know I’m responding to this a couple days out, but I had some thoughts. Most conventional lenders will do a loan on the lesser of the purchase price and appraisal. So if you raise the purchase price to $86,750, but it appraises at $78,000 you still probably won’t get too far. Not to mention the red flags that are going to shoot up when all of a sudden the underwriter sees the purchase price just jumped up that much. Just my thoughts. Good Luck
What about when a person assigns the purchase agreement for a fee. How does the bank view this. For example: Buyer A enters into a purchase agreement with the seller for $55,000. Buyer A assigns the purchase agreement to Buyer B for $10,000. The total loan for Buyer B is $65,000. The appraisal of the property is $70,000. Will Buyer B have a problem obtaining the loan and paying Buyer A $10,000 at closing?