Seller paid repair credits

3 Replies

All of the properties that I have purchased were in need of repair and I negotiated as seller repair credit which is always an issue on the day before closing. Is there a limit on how much the seller credit can be? Also does the credit have to be paid to a 3rd party contractor? My first deal it was paid to my LLC. 2nd deal my realtor told be it could not be and I had it paid to one of my contractors. 3rd deal it was for missing appliances and again paying to my LLC was rejected even though technicality the mortgage is in my wife's name and she is not on the LLC.

If these repair credits are such a hassle prior to closing, whey not have the repair credits applied to purchase price instead as a reductionn in sale price ? You can then take out a higher cash out loan on the property for repairs.

Reduction in sale price does not improve cash flow as much as the  improvements to the property will produce in rental income. I have never heard of a cash out mortgage for an investment property before. 

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