Posted by Ron Ohara on November 02, 2000 at 21:23:50:
In response, the question that was originally asked, if there were companies that would buy the security instrument concurrently with the sale. There are companies that will buy the security instrument concurrently with the sale of the property from Seller to Buyer. Again, everything would be subject to credit of buyer as well as appraised value of the subject property as well as the terms and conditions of the security instrument and whatever additional items required by the funder. As to the “flip”, I have to assume you are thinking of a Buyer of a property purchasing the subject property at a discounted price (property valued at an example of $100.000.00 and buying for $60,000.00), and that buyer thus trying to sell the same property concurrently at the appraised value of $100,000.00 by having the new buyer putting a little bit down and the Seller carrying back a large security instrument. A lot of funders are staying away from purchasing the security instrument because most Sellers cannot justify how a property valued at $100,000.00, buying for $60,000.00 and concurrently selling for $100,000.00. What I have come up against are as follows: 1) Funders want verifiable proof of the improvements on the subject property which raised the sale price from $60,000.00 to $100,000.00; 2) To the funders, purchasing the property at a discounted price due to distress sale or even an agreement to sell low, will not be acceptable to some funders. There are quite a bit more why they will not purchase these type of security instrument due to “flip” sales. Hope this helps.