Dallas, TX · Member since 2018 · 29 posts · 63 votes
Hello Biggerpocket Entrepreneurs,
Thanks for always responding to my messages and giving guidance. I really appreciate.
I have a little bit of a challenge. I was able to get a motivated seller deal, but the seller is basically looking for cash buyers only. The deal is a good deal to wholesale, but I am particularly interested in the house.
It's a duplex, which I plan to buy using FHA 203k financing. Is it possible to get short term private money/hard money financing to pay the owner of the house in cash and then secure the FHA loan within a month to pay off the hard money/private lender?
I am in the Dallas/FortWorth area. This is a great deal I do not want to pass on.
What you are missing is the REASON he or she only wants cash...? Does he want a quicker close? Is it jacked up therefore not financeable? Does he want a guarantee you can close and financing wont fail?
HML will cost you a couple grand PLUS points. THEN you will owe closing costs, title, and all that again when you refi. let alone if you dont already have the process started with a HML, you are a couple weeks out at least.
What I would do is figure out what this person's story is.... and solve it. He wants a quick close? OK, offer him $5k more to wait a month. still a savings over HML costs and interest. He is worried you will fail the finance test... if you are comfortable, give him a big EMD and waive the finance contingency. Talk to them and figure out what their real issue is... it is never a "cash" deal anyway....
You may only use the 203K on an Owner-Occupied property. Not sure what your intentions are as you didn't indicate if this is a rental, flip or primary residence. You're not likely to get a private loan on a primary residence either, as those loans are automatically regulated and most Private Lenders don't want regulation headaches.
If it's a straight flip, you can finance up to perhaps 90% of your project with a Hard Money bridge loan, but that may not jive with the Seller's stipulation for cash.
What you are missing is the REASON he or she only wants cash...? Does he want a quicker close? Is it jacked up therefore not financeable? Does he want a guarantee you can close and financing wont fail?
HML will cost you a couple grand PLUS points. THEN you will owe closing costs, title, and all that again when you refi. let alone if you dont already have the process started with a HML, you are a couple weeks out at least.
What I would do is figure out what this person's story is.... and solve it. He wants a quick close? OK, offer him $5k more to wait a month. still a savings over HML costs and interest. He is worried you will fail the finance test... if you are comfortable, give him a big EMD and waive the finance contingency. Talk to them and figure out what their real issue is... it is never a "cash" deal anyway....
FHA is the biggest pain for the seller, motivated sellers typically are motivated because they for one reason or another are unable to keep the property.... the last thing they typically want is more headaches to sell it. If they wanted the headache of a FHA why not put it on the market and get top dollar?