Can I ask for cash at closing?

Question

I buy and hold single family rental homes - Terms are standard 20% down.

I just started a strategy of increasing my offer price to get some closing fees paid for. For example. If the accepted offer was 50K - I would revise it to 53K with the agreement the seller will give me 3K towards closing. This reduces my out of pocked.

Can I use this strategy and just ask for cash at closing in addition to having the closing costs credit? I would be happier paying more for the home if its going to cost me less upfront.

Michael Smith · Answer

@Adam Craig if you're using a Conventional loan, for the purchase of an investment, interested party contributions cannot exceed 2% of the contract price.

Adam Craig · Answer

I am using a commercial loan for these properties. Thanks for the tips I should probably just ask my lender.

Jeff Rabinowitz · Answer

Do you have a real estate salesperson license? It is possible to designate the seller contribution toward repairs. If you combine that with a commission on the buy it is possible to pull some cash out of a low down payment bank financed purchase.  If you use private money to finance your purchase you may be able to pull repair funds out at closing. Hard money lenders or more experienced private lenders would usually require excess funds beyond a token amount to be put in an escrow account and will only offer this option if you are a very experienced rehabber and/or you can demonstrate that you are purchasing the property well below market value.

Frank Woodin · Answer

Depends on the loan vehicle you are using and the loan appraisal of the property.  Last year I bought a property and asked for a $10,000 redecorating credit back at close.  Since I was using a commercial loan for the property and I ran it by my commercial portfolio lender (he had no problem with it), and the property appraised for more than what my offer was I walked away from the closing table with a check for $1900.00

Matt Cramer · Answer

Michael is that a florida law? In Michigan we regularly write offers with sellers contributing up to 3% towards closing costs however I don't know of a way to get cash back at the close if you're buying.

Can I ask for cash at closing?

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