Is This Realistic...give Me Your Thoughts
Ok, hope this is in an appropriate area, not finance only questions.
Does this method of finacing my 1st deal seem realistic?
-Personal Residence (Appraisal 455k,owe 294k) 161k in equity, get HELOC for 150k
-Investment - Quad to get started. Long story short, I am staying at home with my son until he reaches age 2 (11 months away) so I am on sabatical from my computer consulting business, so I cannot demostrate ability to pay other than rental incomes, albeit 1.65 lender debt ratio.
-Purchase QUAD property out right, asking 170k, value 200k, offer 140k all cash offer.
Refinace (i.e. take a mortgage) on the property for appraisal amount of 189k. Assume lender will only go 80% of value or 151,900.
pay off HELOC, pocket difference(setup reserves, etc)
Continue to rent the quad that flow about 525 after all expenses and debt coverage and reserves of 200/unit/yr.
What are you thoughts, any gaping holes? are there better ways to utilize equity in my residence to finace this deal? Are there any issues getting a lender to loan me the 80% with outstanding HELOC?
Any comments/suggestions are greatly appreaciated.
Click on the link on the toolbar along the top of the screen that says "lenders" and proceed from there
He will still have the heloc. So go for it.
Yes they can deny if the debt is not satisified. I have negotiated many of these types of sales and they are call short sales. The lender has the right to refuse any bid even if you are the highest bidder.
Reos.
there is a forum here just for shortsales
http://www.thecreativeinvestor.com/residential/ViewForum35-11148.html
Shortsales take patience and organization skills to complete. There is also turnaround time of several weeks or more. As the number of foreclosures has risen here in Florida, I see more and more lenders taking properties back at the sale. 2nd mortgage holders are not even stepping up to bid. There is definitely a lot of opportunity in my market for discounting payoffs on properties with little to no equity.
When you say as is FMV do you mean like what other houses in the area are going for?
Sorry i figured someone would call me on all my mini questions huddled up into justa couple
And you said for a novice not much I can do as in this boat has sailed but what would you have done or should I say is it a time frame thing (like meet me at the auction w/ cash in hand for anyone) or an experience and know how thing?
The houses in the neighborhood a couple on the same street and a search of the entire zip yielded prices between $450,000 and 1.5 mil! Is that what you mean by fair market. The state tax assessed price for this property is 475,000.
If the auction is next week.. I do not believe that the bank will defer the auction for a potential mortgage sale. If you had cash.. they may have shorted it. If the deal is this good - check out some hard money lenders who could get you the cash quick. If not... keep looking there are all kind of deals out there.
you wrote, "When you say as is FMV do you mean like what other houses in the area are going for?"
Other, comparable houses... meaning similar size, age, features, condition, etc.
Estimate value adjustments for condition, number of rooms, size of property, location, etc.
At what prices are comparable homes listed, and sold? How long do they remain on the market before selling? Are any comparable homes being sold by foreclosing lenders (REO) or are any of the homes sold under duress?