What do I do????????? - Posted by JEFF

Posted by phil fernandez on July 04, 2001 at 17:29:09:

Dogs guarding the porch. Got a chuckle out of that one.

What do I do??? - Posted by JEFF

Posted by JEFF on July 04, 2001 at 11:45:27:

My folks have a rental property that fmv is 55k or so. All they want is the mortgage balance for the property whcih is 32k. Is it a way they can just "give: me the property like deed it over to me and I refinance it to take cash out? If so
How exactly do I go about doing this? I want to refinance so I can get about12-15k out of the deal so I can start me rehabing ventures.

Should I just consult a lawyer for this? or mortgage compay or…realastate agent? or waht?

Busted !! - Posted by JT - IN

Posted by JT - IN on July 04, 2001 at 14:49:44:

Don’t think that these DOGS, aren’t watching the porch. Most of the regulars here, will “catch you”, if you repeat a post, just to fish for a differnet answer, in the event that you didn’t like the previous answers that you received.

Try another message board with less experienced investors, and maybe you will get the answer that you are looking for.


Re: What do I do??? - Posted by JohnBoy

Posted by JohnBoy on July 04, 2001 at 12:48:24:

You already posted this and were given answers. You stated the property rents at $400 which is a break even cash flow now. You said a friend rents the property and you have no intentions of raising the rents on him/her. WHO would make up the extra $100 per month in payments if you have no intentions of raising the rent???

Are you going to pay the difference out of your pocket every month just so your friend can live there cheaper? Are you willing to put your parents credit in jeopardy by turning this property into a negative cash flow position???

If the property only breaks even then you should not even consider wanting it unless you plan to sell it to get the equity out or increase the rents to produce a positive cash flow.

How is your credit? You will need excellent credit to refinance and pull cash out. You will also have to show a positive cash on the property for a lender to approve the loan. That means you will need to raise the rents to get the loan. The lender isn’t going to give you a loan when you show negative cash flow.

The most you would be able to borrow as a non-owner occupied and pull cash out will be up to 80% of appraised value. If the property appraises for $55k then the most you can refi is $44k. After paying off the $32k owed you will have $12k left. After closing costs you will only be able to get about $10k max. You will also have to pay for the appraisal before they give you the loan.

You will also probably have to own the property for at least one year before a lender will refinance it with a cash out for any equity.

You don’t need to refi this to get cash for your rehabbing ventures. You can do that without needing any of your own money. You can use a hard money lender to pay cash for these properties and borrow enough to cover the rehab costs if you buy right.

Instead of putting yourself into a deep hole before you even get started read this site and get EDUCATED in what you’re going to be doing!

The way you’re heading right now is down a road to self destruction and you risk dragging your parents down by ruining their credit right along with you! Is keeping a friend in a property without raising the rents enough to justify taking cash out putting the property into a negative cash flow more important than your own parents welfare???

Re: What do I do??? - Posted by phil fernandez

Posted by phil fernandez on July 04, 2001 at 12:43:13:


Thought you posted the same question a couple of days ago here. And you got some good answers.

JohnBoy probably gave you the best answer. Why not run with his idea of having your parents deed you the property. You take the property over subject to your parents mortgage. You won’t need any money out of your pocket for a downpayment.

After acquiring the property this way you could than refinance it and pull money out of the property. You may have to hunt around to find a lender who does not require seasoning, but they can be found.