Buying With Cash, Then Financing
Hello,
I am new to all this and i have the following question: I plan to buy SFHs in foreclosure with cash, rehub the houses (again using my own money) then take a mortgage based on ARV and get most of the cash I put in back. Could someone please tell what my financing options are?
Thank you,
JP
Well considering you will own the home outright, and the repairs have already been made, then your financing will depend on the LTV, your credit, and your income. Also, some lenders will require the title to be seasoned in order to refinance, but some do not. But if you have good credit, and documentable income and assets, and the deal is solid, then you should be able to get a great N/O/O loan. I am assuming this will be a rental.
You are at an advantage by having enough assets or available credit to be able to buy with cash.
Thank you! yes it will most likely be a rental.
I am working with a friend and here is what we were able to get so far:
75% LTV,
3% origination fees
very high credit score
7.5% interest
is this a good deal, can we do much better?
Thanks!
JP[ Edited by woland on Date 01/22/2008 ]
so, tbird56, or anyone else, please, do you think the originations fee of 3% is a bit high - this is on top of the other non junk fees that might be needed (attorney etc)? in my mind it is not how much we are making on the deal overall, but rather what is the best option available given the current market conditions?
thank you again
JP
ps will def check out REOs[ Edited by woland on Date 01/22/2008 ]
I have just begun doing what you are about to do. Last year I bought a house using my credit card because I got less that 1% interest for 3 months. Did rehab out of pocket and am expecting my re-fi to be approved within a week or so. I am getting the loan through my loan broker. My big criterion is the number of loans that this lender will do. A month ago they would do up to 19, but I am told now that they will only do 5. I should have a little money to pocket after the smoke clears.
I think the percentage that is reasonable as an origination fee has a lot to do with the size of the mortgage. For a small loan 3% is not unreasonable, but for $100K it is way high.
Investor loan with good credit and substantial income/assets- last week I was offered 7%. Another broker thought that was too high, told me she could get me a HELOC for less. Rates dropped .75% today. I will know more tomorrow when I will close a deal and see what the current rate is.
Chris
Thank you very much for your input. As I will continue my research I will post the loan terms I see in the market here, please, do the same if possible. I suppose posting a rate will be difficult in the next few weeks with all the turmoil going on.
Thank you,
JP
ps what is a reasonable origination fee for a NOO 100K investor refinance loan? 1%? $1000?
[ Edited by woland on Date 01/23/2008 ]
Beat to the post again!
Arden- sounds exactly like the Lansing market, and what I am doing here...
Chris
an update. the best NOO refinance based on LTV i have seen so far is
80% LTV
1.5% origination fee
and bank rate (meaning no additional spread on what the bank will charge you for which the broker gets paid).
we are talking ~ 80K principle.
JP
JP,
How about a HELOC on your investment property? Cash out up to 80% ARV, no points, no closing costs, no FNMA 10 loan limit.
Two days ago I was offered a no fee adjustable rate investor HELOC at 6.5%, up to 95% LTV, using appraisal ($44,500) rather than purchase price ($28,000). So I could have closed with the conventional loan, then turned around and pulled out $42k with the HELOC, paid off the loan and costs and walked with $10k in my pocket at the end of the day.
Oh, yes, and a higher payment. Details, details. Still might do it if I find a good use for the funds...
Chris
NewKidInTown3, Thank you, Yes. i am looking into this - the rate is a bit higher for those.
another alternative i was suggested is to open an unsecured line of credit, but the quoted fees were high.
there is so much to the financing side of this business and the various info is rather hard to come by and this is not even getting into the "real" estate side of it! ouch! lol!
Quote:
On 2008-01-24 22:51, ypochris wrote:
Two days ago I was offered a no fee adjustable rate investor HELOC at 6.5%, up to 95% LTV....
Chris - where did you get such a loan? It sounds great! thank you
-sandy
National City
Chris
Anybody still successful buying w/ cash, rehabbing and cash out refi? Where are the refis coming from?