Lender won’t close deal, lingering ? Need advice

[Dustin Pool]

My name is Dustin , investor in the Sherman / Denison area of north Texas about an hour north of Dallas.

I’m having some issues in getting a deal to close. The deal is as follows : purchase 100k , reno expenses 45k, comps coming in on the lowest 195 k , high 235k. Property was a 2/1.25 another investor, did some haul off, and a hack job conversion to 3/1.25. Property is I good shape no foundation or roof issues. Is mostly cosmetic, our plan is to redo the wall properly and extend the toilet room to make a true 3/2. New flooring, new windows and new kitchen and baths. I ment personally with investor/owner and was able to get it on contract. Signed 1 of Oct , with a potential close date 2nd to third week of Oct. we still aren’t closed!

I started working with a hard money company: things seemed to go sooth at first The original term sheet was for 100 % purchase , 100% reno , closing cost around 5k, and around 15k reserve. That completely acceptable and doable, I made sure I got all info and numbers upfront of any expenses so that they were accounted for before signing contract. After however , lender kept requesting additional documentation, or wanting to change formats that banks or whoever would provide, combated statements on how they print them etc m, very annoying but I went out of my way to appease and just get deal done, they assured they would close , but now I’ve heard this over and over they would say oh it will be Monday , then two more days , etc, then come back with needing something different. I understand underwriting can have requests but it seems ours is trying to kill the deal. They refused to recognize funds in accounts, I then set up a new account specific for this closing, they wanted reserves in accout and rushed me to place full amount to close just two days before they said they would close they then combated saying they didn’t send funds because they couldn’t source and questioned why large amount was deposited, I went out of my way time-outs , they wanted business records for other cash businesses to justify , then refused, provided invoices and records for cash received for rentals over a 4 year period and another cash business, t he refused to accept any of that , even though each all showed more cash receieved than what the deposit was, a banker I know offered advice on how they deal with it with his underwriters, helped make a promissory note and showed, I’m giving cash funds to be invested in the business for the purpose of investment. The property was being purchased in the intitiy , this was also denied.

During this back and forth the numbers kept changing , to closing cost at 7 k to 8 k , reserves to 17k, 18k , 23 k, etc . I now have funded 30k into this account of funds that I didn’t really want on record or have that much in the account, just to get the closing done. After denying sourcing funds, we seemed to get over the temporarily, and we had another closing they had promised was happening a month after original closing, well it didn’t , when I called it took two to theee days for a return call , they said they didn’t send funds to the closing because underwriter just did a soft credit check and said my credit was below their threshold, verbally saying 100 point less than what we stated, I had pulled credit before contacting and starting the process and signing contract as part of the I want no suprises thing, I couldn’t understand how they are reading or how it could drop in a 1 month period, so I pulled it again, but it’s still showing 700’s , just a few points less than when we started. I questioned them on why if or shouldn’t it have been pulled when we first inquired about the loan, also if they could provide proof. I got no answer and they tried blaming me for credit , I sent screen shot of my credit pull so I’m not sure how to combat when they aren’t being cooperative , the only option they gave was have a cosigner but pushed to go asset based because it would be like starting over with underwriter. We are a month passed original closing and time is of the essence, so I said how do we close it , they had been pushing me to do it in terms asset based from beginning but I didn’t want to as it didn’t make sense to tie up they much liquidity, but at this point with all of the changes to terms and what I’ve funded in the accout , it’s basically the same, so I said let’s just get it done. Now , dieing this time they had more suprises and expenses , I had to pay for a appraisal, and richer values etc , which was charged to my card the day after I said I was going to have another money lender work on getting it closed, since it was paid and ordered I went ahead with them thinking they were going to close that Friday, that didn’t happen and now they said they can easily close it on asset based , we were suppose to close again, didn’t Happen, now I don’t really don’t know what’s going on, responses are days apart or short one sentence etc , ife had to go out of my way reaching out to processor and now the company owner who won’t answer the questions, but give one liners avoiding specific answers, I’m just tying to figure out what might be the last puzzle piece, apparently the loan guy reached out and had a confernce call without me, discussed doing a seller carry back because now the underwriting is saying they are only loaning 70k of purchase and I’m having to have like 30 k in closing. But the seller carry back bring numbers back to our original term sheet.
he sent me a text saying he had talked to seller and got the seller addendum and sent it to underwri, I wasn’t happy but it was done , then we didn’t close again , I reached out found out seller had talked to him two weeks ago but didn’t sign because it was never sent to him, I called loan guy , he denied he ever said that , so I copied his text and sent , that didn’t get anywhere , but boiled down to the seller needs to sign, now the numbers have changed too , loan guy first said 10 k , then 15k now in the one sentence response he is saying 45 k seller needs to carry back. Im Leary to even present that he wasn’t happy about the first numbers. And we both don’t understand how or why the change or how it’s bringing the closing back right.
ive asked three or four questiones
in that email about just which section we need to fill out and what numbers to out in and simple contract stuff , but all he responded with is the one liner two or three times about 45 k.

I fill the lender has been unreasonable and or playing games to kill the deal , I’ve been on the phone with everyone trying to keep things rolling , talking to banks to out my funds in cds or whatever weird request to validate or source and do whatever else is necessary to get it closed or keep communication since they aren’t communicating with title and each of the countless closing dates that haven’t happens the lender never called my one to give a heads up they weren’t sending funds.

I’m already got money invested in these appraisals which wasn’t needed and in ever received, and richer values , as well as time and design, meetings, clean up of property , and reno prep at propety to get ahead of draws with seller permission because we thought we would close and I had a schedule of when I wanted to be competed and refinanced. So I really don’t want to walk away and loose that, or the house as it’s a pretty simple flip and I need that right now.

I reached out to Kiavi as suggested by our investor meetup group , but the online app denied being able to provide services , I talked to someone there and they couldn’t answer questions, they had said the deal was good when they evaluated, and looked at everything , but since the app denied instantly they can’t give a reason or go further.

I’m kind of lost as where to turn to or what to do next to keep moving forward. The simplistic thing seems, if I had someone who would co-sign and we just accept it’s going to take another 10 days for underwriting this company I’ve been working with can get it done and numbers all go back to that 5 k closing and I don’t have as much liquidity tied up, to work on my other projects. Or keep reaching out to start new with another lender , but again that time that goes into documentation etc , I’m barely keeping the seller on, and he had mentioned about just keeping it off market until next year, but I’ve still got him for a little bit longer letting him know we are trying to just get it wrapped up. But im on thin ice for sure.

It’s crazy because it seems no matter how I overcame the underwriters concerns and throwing money at it to show we have plenty to get it done , it just won’t close or get done.
I’ve previously did only owner carry , contract for deeds , or a private money partner which we did a lot and I probably got spoiled but he passed away, this just seems like a bad experience working with hard money.

I could use some direction.

[Chris Seveney]

I will be honest I did not read this entire post as it is extremely long -  I stopped at 100% purchase 100% renovation as that does not exist unless you are extremely experienced. Hopefully you did not send them money.

Who was the company?