Posted by Phil Pelletier on December 28, 2005 at 16:27:58:
You may have to bite the bullet and take out an extra $10,000 in cash after the refi and have the septic system redone to pass Title V. It is 2005 and the home has sat there with no investment required for getting rid of the waste for over 70 years. It may be time to pay up and bring that home into 2005. The appraisal is only as valuable as any lender is willing to loan against it. If it needs upgrading, pay the bill and get it upgraded. Ultimately, that system will probably need to be upgraded for the home to be sold on the open market anyway. The best time to do that is when all the cash is “funny money” (borrowed from day one refinanced loan).
I am looking for some advice on how to best structure a buyout on a beach house currently owned by my mother and two uncles.
Here is the situation:
Family owned beach house(duplex) with appraisal at $265K for the whole house.
Mom/Uncle # 1 owns 50% of the duplex (50/50)
Uncle # 2 owns the other 50% of the duplex
Mom/Uncle # 1 agreed to sell me their interest in the duplex for a total of $50K (my mother is gifting me her $50K interest).
Uncle # 2 agreed to sell me his interest in the duplex for $100K.
So I need to come up with $150K to purchase the whole duplex. The house is owned free and clear by my mom and both uncles. Uncle # 1 is looking for the $50K now, Uncle #2 is open to taking some $ down and taking back a mortgage on the balance.
Issues:
Duplex will not pass title V septic
Deed is still in my grandparents name. They passed away in 1995 and my mom and uncles never changed the deed.
Questions:
What would be the best way to structure the financing on this purchase? I have 725 FICO score.
Will a bank loan me $150K on the duplex given the appraised value of $265K and will they check for Title V?
What is the best way to get the deed into my name (i.e. directly from my grandparents to my name, or from my grandparents to my mom and uncles names, and then to my name?)
I plan of letting my mother live on one side of the duplex, and keeping the other side for my use and my family’s use for now and the future for a few years, and then selling the whole duplex after 2 years for a good profit.
Suggestions, imput and feedback is greatly appreciated.
Re: Need Advice on Buying out Family Members - Posted by Matthew G
Posted by Matthew G on December 30, 2005 at 12:06:13:
Cole-
Who said to do a Septic Inspection??? Just wondering how it came up. we don’t ask nor do appraisers for that type of inspection. did you get my last email. I can get this done.CALL ME!!
M.G.
Re: Need Advice on Buying out Family Members - Posted by Phil Pelletier
Posted by Phil Pelletier on December 27, 2005 at 18:28:44:
If your grandparents had an Estate that conveyed to your parents, it could be as simple as recording their death certificate with the county and showing the conveyance documents from the Estate and putting your parents name on the title. They could then probably file a Grant Deed with you in the title position along with them and you could refinance that place for up to 90% of it’s value easily. The septic will need to be addressed if you are to get a conventional loan.
Regardless of how the money is to be split up, the key is the loan to value of the place. If you need to get $150,000 out of a $260,000 place, it should be a piece of cake. The rest is just paperwork for the title company and possibly your attorney to take care of.
Re: Advice on Buying out Family Members - Posted by Matthew G
Posted by Matthew G on December 27, 2005 at 10:30:48:
Cole-
Do you have any idea whats wrong with the septic? some loans have a hold back provision for the cost of the septic repair. Over 9 yrs experience. Email me to discuss.
Matthew G
Central Mass.
House was built by my grandparents back in the 30’s. As far as our family knows, the waste goes into some form of home-made holding tank. It has never been cleaned, but also has never given us any problems. My mother and Uncles think that the house will need to pass Title V to sell the house to me. The house is at Salisbury Beach, in Mass. I am not sure that it does, or if there will be any issues with my securing an equity loan to get $150K out of the house valued at $265K, without touching the septic.