Where to get the money? - Posted by Ron M

Posted by John (OR) on March 03, 2005 at 17:05:23:


Hopefully you find what you are looking for.

I do think it is a little short sighted for you to close the door to hard money. Look at it this way. You can joint venture with someone and give up half the profits after then get their cash back. Or you can borrower on HML terms and keep more then half the profits while not having to share control.

The deal as stated is a bit too tight for some HML terms. It will depend on who you ask.

If you stand to lose the opportunity then reconsider what it is worth to you. This one might be too thin and you should walk away. Otherwise you should decide how much you want to make and then not worry about the costs. Work to keep them as small as possible but at the same time focus on making money. If you wife says no to using a HELOC then paying a bit more for outside finance (JV, HML, etc) might be the difference between zero profits rolling in and some profits rolling in.

As you said, you only have 2 weeks.

Oh, if you assign it I suspect you will make less then if you did the deal. Otherwise the buyer is really paying too much as they are taking the risk of finishing the project. They should get the bulk of the profits.

John B. Corey Jr.
Chelsea Private Equity LLC

Where to get the money? - Posted by Ron M

Posted by Ron M on March 02, 2005 at 09:53:45:

(Duplicate post from main news group)

I am looking at the following deal in Spokane, Washington:

ARV: $90,000 - $99,000
Tax assessed: $89,000
Repairs Cost: $15,000 - $20,000 (Cost of roof $8,300)
Purchase Price: $55,000

The owners of the property are in foreclosure. They signed a deal to sell me the property on a short sale for $55,000 and the bank has agreed to the sale.

The current owners are willing to sign a Lease / Option for $85,000 if we just put a roof on the home.

I took this to my mortgage broker, who had an appraiser look at the property. The appraiser said the property is in “Average minus” condition? Needing repairs in excess of $2,500. Duhhhhhh.

The mortgage broker has shopped around for a conventional loan and not found anyone willing to do this transaction because of the cost of repairs and more specifically the condition of the roof, the exterior paint, and some needed interior repairs.

I have a partner and my own credit score is above 720. His is around 700. My wife doesn’t want to use a line of credit against our personal residence to do this deal.

I am looking for some advice as to how to finance this project, preferably with a small down payment or no money down. Also, not wanting to get burned by paying high points or an excessive cost of the money (ie. hard money). Hope I haven’t left out any pertinent details. Looking for advice and/or contacts, I have just under 2 weeks till this has to be funded, or I lose my $10 earnest money check :slight_smile: But more importantly, I lose the opportunity to rehab this property myself.

One other question, if I assign this deal to another investor who has the money, how much of an assignment fee is considered fair. I haven’t ever wholesaled a property before nor bought one wholesale before.

Thanks everyone.

Ron M (WA)