When Doing REO's Is It Possible To Get Cash At Closing?
I know the bank is trying to rid itself of the property but is it possible to get rehab concessions out of it?
If not, how soon after closing can you take out a second on the property for maybe a few cosmetic updates and money for your pocket?
Has anyone every done this?
quinn
Concessions for rehab costs? Doubtful. Banks want clean, simple, easy to understand offers. They won't like a $100K offer, 10% discount for repairs, etc.
However, can you get cash at closing? The answer is yes. The trick is not to push the seller, but rather find the right financing. Find a good mortgage broker who has programs that will loan against the appraisal or tax value, get a construction loan, get a HML loan. A good mortgage broker can get you a cashout refinance one day after you buy a property (if the equity is there). That's what you need to be looking for.
Roger
As Roger stated you can get cash out on these types of deals. You need to ask for a rehabb loan . Here is an example, since you gave no figuresI'll use Roger's:
Sale Price:$90,000
Repairs: $10,000
ARV: $125,000-$150,000.00 (if in good shape)
You can go as high as 90% LTV, depending on your credit, debt ratio, credit depth. These loans are available for primary and rental units.
You will have to call a lender, or broker in your area. They are available in 48 states.
Lori
[addsig]
Finding and establishing a relationship with a forward thinking lender is essential.
Most lender make a loan based upon the lower of two numbers: the appraised value, or the sales price.
You need a lender who will make a loan based upon the appraised value, NOT the contract price. Then, you won't be penalized for structuring a shrewd deal.
Thanks everyone for responding.Sorry I didn't post the deal.
Here it is:
REO, asking price is 91,900
comps in the area are around 130-145,000. Really nice area.
I'm putting in an offer of 87,500.
I'm trying to figure out how to take equity out of the house to use to re-invest and have cash in my pocket. I may end up just CFD for 3 years then let buyer re-fi or I'm considering renting it out. Either way, I need the money out of the house to keep my investing going.
quinn