Real Estate Investor · Cookeville, TN · Member since 2008 · 34 posts · 1 vote
Just locked up a property with a partner. I'm putting up all the funds, including repairs. He's doing all the labor and managing the project. We will split profits. Thing is he actually made and got the offer accepted (REO) in his name . Bank Addendums came in and do not allow assignments or financing or deal is off. I need to make sure I have sole ownership since all $$ risk is mine. Partner suggested he just quitclaim it to me after his closing with my money. Not sure I'm comfortable with that. Any suggestions??????
I saw your post, and tried to see a safe way around it, but nothing comes to mind. Sounds like the bank is only going to allow a cash closing in your friend's name. Pretty typically, in my experience. The "no financing" provision is unusual, though. I don't see why they would include that, other than not wanting any delays due to the financing or a bad appraisal.
Do you know the title company who's doing the closing? Can you try to set up a double close with them? You provide the money, your friend buys, then you immediately buy from him. I think if you make the price on the second transaction exactly the same as on the first transaction, they might be more amenable. If not, can you find another title company that would do the second transaction? You give your money to the second title company with a contract to make your purchase, and they pass it along to the first one. I've spoken with one title company here that claimed they would do that.
If you trust your friend not to try to screw you, you could loan him the money in a separate, unsecured transaction. You lend him the money, with a promissary note. He uses the money to close the deal. Then he uses the property to pay off the loan. That way, its three totally separate transactions, but you have at least a little security for the money while he has it.
Jon,
I did a little more checking around and it appears the double close is the safest bet for me . Only down side is paying TN transfer taxes twice, but that's not a bad deal for the security of holding the deed.
Thanks for your help.