getting cash back at closiing for repairs - Posted by Dale_ohio

Real Estate Investing
1

Posted by Kristine-CA on July 07, 2005 at 15:47:50:

Dale: one thing you could do is change the contract to purchase
property as-is, change the purchase price to 5K less and skip the
reimbursement thing. Do you think the bank will go for that? Kristine

2

getting cash back at closiing for repairs - Posted by Dale_ohio

Posted by Dale_ohio on July 07, 2005 at 12:34:41:

Hi All, I am in the process of buying a Bank Owned property. It needs new carpet and a paint Job. In the addendum, I asked for $5,000 back at close for the these repairs.
The bank says they can’t do it, but they can put it in escrow and want a bid from A company that is going to do the work. And they will write them a check.
I was planning to do the work myself. would it be fraud to have MY company submit the bid? Or is there any other way around this? thanks

3

Re: getting cash back at closiing for repairs - Posted by John B. Corey Jr.

Posted by John B. Corey Jr. on July 09, 2005 at 11:54:57:

Dale,

  1. You might want to do business with the bank in the future so do not mess around with them and using your company to submit the bills.

  2. Hire out the work and bargain on the price. That said, figure out who gets the excess if the work comes in for less then $5K.

  3. If you expect to do a lot of deals where this could be an issue find a contract you can work with over time. Maybe one where you can trade services or otherwise help. Again, stay away from anything that would upset the banker. Make it a clean deal.

Why keep the banker happy and make sure that the banker believe believes you are ethical, etc?

I am a hard money lender who will fund deals in OH. I have an existing client come to me to refinance a property he had purchased the prior December (it was mid spring). He had bought the place at a good price. It turns out that the bank had called him when they realized they needed to get another home off the books before year end. They rang him because he had an established relationship and they knew he would perform as advertised.

BTW - I am assuming that you are making a profit even if you get the rehab done at retail. If that is not the case then this is not a deal no matter how you spin it.

John Corey
Chelsea Private Equity LLC