no $ down, refinance, owner participation??? - Posted by GregCT

Posted by JohnBoy on April 22, 2001 at 24:05:14:

The biggest problem you will have with refinancing after taking title is “seasoning”. Most lenders today want to see 6 - 12 months of seasoning on title.

If you can find a lender that will refinance you within 30 - 60 days from taking title in your name then you can do deals like this.

If you found a buyer willing to deed the property to you so you can turn around and refinance it to pull the cash out, you can offer to sign over a “quit claim deed” for the seller to hold until you refinance and pay him off. If you don’t follow through the seller can record the quit claim deed taking title back to his property. When you refinance and pay off the seller then you get the quit claim deed you signed over to the seller back at closing.

The biggest issue you have to do this besides finding a willing seller to go along with it will be finding a lender that doesn’t require seasoning of title.

no $ down, refinance, owner participation??? - Posted by GregCT

Posted by GregCT on April 21, 2001 at 23:48:35:

i am familiar with the creative financing solution (I hope this is clear):

buyer pays all cash at 75-80% the appraised value of a home (a low-ball offer, attractive because of the use of cash)(with the use of a financial partner for the cash if nec.), then immediately refinances the home through a bank with a 75-80% LTV loan - to cash out the partner, possibly put cash in pocket (if the loan can be obtained for greater than the closing sale price), and essentially own the property “no money down.”

i have just a few questions about this strategy…

  1. has anyone used it? how did it work out?

  2. would it be possible to forgo the use of a partner by somehow getting the seller to become your “partner”? (meaning they would deed you the house, wait, and you would refinance and pay the 80% from that loan as soon as you obtained it.) i know this would require an almost impossible to find, VERY trusting seller - is there a contract that could be written that you own the house contingent on approval of the required LTV loan from a bank within 30-60 days to provide more security to a seller to make it more attractive/possible? would this create encumbrances on the deed to make the loan you’d be applying for possible? any other ideas to provide security to a seller that may not interfere with the refinancing?

it feels like i’m close to a cool strategy, but was very interested in input from some of the rest of you!


Re: no $ down, refinance, owner participation??? - Posted by Michael

Posted by Michael on April 22, 2001 at 23:14:18:


Another option would be to have the seller refi his own property with you coming in and taking over the new mortgage “subject to”. Just write up a contract stating this to let the seller know you will do what you say you will do. This will also eliminate the need for title seasoning for the refinance.

Happy Investing

Michael KY.