In a really tough spot - uncertain what to do - advice needed

Portland, OR · Member since 2016 · 108 posts · 33 votes

Hey guys, so we have a closing scheduled for this coming Monday, and I need to wire $24,000 to the closing company for this house today (Friday) to have the funds reach on time for the closing. This will be my first home purchase and we are going to use the home for my mom to retire in. I am self-employed and show no income on my tax returns, so we had to go through private sources to get the funds. The first private lender (mom's friend) backed out a couple weeks ago, and just yesterday (Thursday) our other private lender (my dad) bailed on us. I don't know what to do now since both of our private lending sources bailed on us. We are very modest people and $24,000 is beyond our personal budgets at this time. Is there anything you guys can recommend? Is there anyone out there who knows a hard money lender who could work with us on this? I'm panicking because we really found the perfect place for my mom to finally be able to retire in peace, but now both of our private lenders bailed on us. Any advice on this would be hugely appreciated... we need to figure out what to do today (Friday, September 6th) and are nervous wrecks over this. Thank you for any replies.

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Caleb Heimsoth

Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes

@Chris M. You need to delay closing. That’s the only realistic answer. Delay closing 2-3 weeks and figure out how to finance it.

You will also likely need to use an actual lender as your “private lenders” aren’t really lenders and you’ll likely have the same issue you’ve been having.

Find a no-doc lender, pay the higher interest rate and put 25-35 percent down.

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Patrick Garrett
Real Estate Broker · Trussville, AL · Member since 2018 · 21 posts · 6 votes
7y
@Chris M.
Try Mrcooper.com; they used to be called Nationstar...They don’t usually ask for tax returns as long as W2 income and credit score is good...I just closed on my personal home with them and my loan was significantly more than what you need.
0 Reply
Chris M.
OP
Portland, OR · Member since 2016 · 108 posts · 33 votes
7y
Originally posted by @Jerry N.:
@Chris M. Your agent probably is frustrated, but guess what? It's their job to help close the sale. Their commission on this particular sale isn't huge but a good agent would recognize that maybe you'd look for another deal in the future. Don't over complicate things even more now by trying to go around him/her or you might end up with legal problems too. I don't think you would find many people at all on these forums who could say they've had a sale with absolutely no issues. There are always 'back and forths' and almost always ups and downs.
Good luck, it sound like you are doing something nice for your mom.

Thanks, Jerry, it is reassuring to hear that there are usually ups and downs in this process. I've watched almost every single Bigger Pockets podcast (on YouTube), subscribed to so many real estate investing channels, read so many books... but man I have learned so much in this process. Experience really is the best teacher. If this deal doesn't work out I will certainly be more prepared the next time around.
My mom has worked very hard her entire life from taking care of her brother and sister on her own, being an Army veteran, a college graduate with a Masters degree... she deserves to retire in peace and dignity and I'm determined to help her do that.

0 Reply
Tania Reuben
Realtor · Southern California · Member since 2019 · 53 posts · 8 votes
7y
Wondering if you own a home you can pull that much equity out of... ?
0 Reply
Jermell Shavers
Member since 2019 · 295 posts · 159 votes
7y
@Chris M. You can’t afford it. From what I’m reading you just need to find your mom a studio apartment and just pay the rent for her until things get better. No point in struggling especially if it will put you in a bad situation
4 Reply
Judy Parker
Rental Property Investor · Closter, NJ · Member since 2015 · 884 posts · 722 votes
7y
Your options are to persuade the Seller to hold the note or forget about buying the house.
2 Reply
Justin Ellis
Property Manager · Scottsdale, AZ · Member since 2015 · 113 posts · 77 votes
7y
@Chris M.
HELOC? Obviously this too will take time but could be a good source if you have any equity in your primary residence.
0 Reply
Todd Powell
Rental Property Investor · Corvallis, OR · Member since 2018 · 840 posts · 1k+ votes
7y
@Chris M. A whole house for $24,000? What city and state, it’s definitely not from where you are at, Portland Or. that would only get you the foundation
1 Reply
Michael Slockers
Real Estate Entrepreneur · Owasso, OK · Member since 2015 · 220 posts · 154 votes
7y
@Judy P.
Totally agree
Even could offer the seller 5k down, total purchase price at 28k (sweeten the deal). The remaining 23k even amortized at five years would only be 466 per month at 8%. In that case the seller would be making 1000 per year in interest plus the principal back.
If you can't get them to bite, why not just go rent something?
Gotta get creative sometimes...
2 Reply
Rob Westerman
Flipper/Rehabber · Cincinnati, OH · Member since 2017 · 19 posts · 10 votes
7y
@Chris M. One mistake that I see from the outside looking in is that you are too emotionally attached to this property. Once you get emotionally attached it is hard to make rational decisions. Postpone the closing step back and find a lender that is not family or friend. If that does not work walk away.
4 Reply
Chris M.
OP
Portland, OR · Member since 2016 · 108 posts · 33 votes
7y
Originally posted by @Rob Westerman:
@Chris M. One mistake that I see from the outside looking in is that you are too emotionally attached to this property. Once you get emotionally attached it is hard to make rational decisions. Postpone the closing step back and find a lender that is not family or friend. If that does not work walk away.

That's a fair point and you're right I have become a little emotionally invested mainly because this house will work perfectly for my mom's retirement - just the right size, in great shape but still very affordable, only 1 story and with a nice backyard that she could enjoy.

@Jerry N. @Caleb Heimsoth @Odie Ayaga I have a very interesting update on the situation: my buyer's agent referred me to a gentleman who purchases homes in cash then sells them to the interested buyer via owner financing. He has offered to buy this home for us if we can put $5,000 down, then pay $950 per month (he would pay the property taxes) for 3 years. I've done the math and after he takes care of the taxes this would result in us paying about $35,000 total for the house, or $11,000 more than what we were going to pay, but it would enable us to get the house. It is a significant amount more than we wanted to spend on the house, but it would be spread out over 3 years. Also a little nervous about doing it this way, but my buyer's agent says he's a reputable guy who has done many deals this way. What do you guys think about that? At the very least I think it's good to have as an option.

I'm also considering the option of selling my vehicle which I could probably get at least $20,000 for, then using my excellent credit standing with the auto maker to purchase a newer vehicle with a couple thousand down and monthly payments. Since I would still be paying down the original loan amount on the vehicle, this would basically be like taking out a loan from the auto maker. But this idea is contingent on me being able to sell the vehicle promptly to a private party.

Thanks again for your thoughts here guys... yes I am a little emotionally attached to this home, but after lots of searching it really is a great deal and hope that we can get creative to make this happen.

0 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
Originally posted by @Chris M.:
Originally posted by @Rob Westerman:
@Chris M. One mistake that I see from the outside looking in is that you are too emotionally attached to this property. Once you get emotionally attached it is hard to make rational decisions. Postpone the closing step back and find a lender that is not family or friend. If that does not work walk away.

That's a fair point and you're right I have become a little emotionally invested mainly because this house will work perfectly for my mom's retirement - just the right size, in great shape but still very affordable, only 1 story and with a nice backyard that she could enjoy.

@Jerry N. @Caleb Heimsoth @Odie Ayaga I have a very interesting update on the situation: my buyer's agent referred me to a gentleman who purchases homes in cash then sells them to the interested buyer via owner financing. He has offered to buy this home for us if we can put $5,000 down, then pay $950 per month (he would pay the property taxes) for 3 years. I've done the math and after he takes care of the taxes this would result in us paying about $35,000 total for the house, or $11,000 more than what we were going to pay, but it would enable us to get the house. It is a significant amount more than we wanted to spend on the house, but it would be spread out over 3 years. Also a little nervous about doing it this way, but my buyer's agent says he's a reputable guy who has done many deals this way. What do you guys think about that? At the very least I think it's good to have as an option.

I'm also considering the option of selling my vehicle which I could probably get at least $20,000 for, then using my excellent credit standing with the auto maker to purchase a newer vehicle with a couple thousand down and monthly payments. Since I would still be paying down the original loan amount on the vehicle, this would basically be like taking out a loan from the auto maker. But this idea is contingent on me being able to sell the vehicle promptly to a private party.

Thanks again for your thoughts here guys... yes I am a little emotionally attached to this home, but after lots of searching it really is a great deal and hope that we can get creative to make this happen.

that's about 30 to 35% interest on his money good deal for him.. offer the seller a seller carry back at 12% see what that does.

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1 Reply
Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
7y
@Chris M. You clearly love your mom and are willing to do everything you can to help her which is great. Selling your car is one idea and buying a good used car. You mentioned in one of your posts that your mom is a veteran. Can she get any help through them?
One other thing to think about is if you stretch yourself too thin, what happens if an unexpected expense comes up with at your home or with your mom's home? I'm assuming you are going to be responsible for any repairs as the home will be in your name and it appears that she has a low income and no savings.
1 Reply
Chris M.
OP
Portland, OR · Member since 2016 · 108 posts · 33 votes
7y
Originally posted by @Jay Hinrichs:
Originally posted by @Chris M.:
Originally posted by @Rob Westerman:
@Chris M. One mistake that I see from the outside looking in is that you are too emotionally attached to this property. Once you get emotionally attached it is hard to make rational decisions. Postpone the closing step back and find a lender that is not family or friend. If that does not work walk away.

That's a fair point and you're right I have become a little emotionally invested mainly because this house will work perfectly for my mom's retirement - just the right size, in great shape but still very affordable, only 1 story and with a nice backyard that she could enjoy.

@Jerry N. @Caleb Heimsoth @Odie Ayaga I have a very interesting update on the situation: my buyer's agent referred me to a gentleman who purchases homes in cash then sells them to the interested buyer via owner financing. He has offered to buy this home for us if we can put $5,000 down, then pay $950 per month (he would pay the property taxes) for 3 years. I've done the math and after he takes care of the taxes this would result in us paying about $35,000 total for the house, or $11,000 more than what we were going to pay, but it would enable us to get the house. It is a significant amount more than we wanted to spend on the house, but it would be spread out over 3 years. Also a little nervous about doing it this way, but my buyer's agent says he's a reputable guy who has done many deals this way. What do you guys think about that? At the very least I think it's good to have as an option.

I'm also considering the option of selling my vehicle which I could probably get at least $20,000 for, then using my excellent credit standing with the auto maker to purchase a newer vehicle with a couple thousand down and monthly payments. Since I would still be paying down the original loan amount on the vehicle, this would basically be like taking out a loan from the auto maker. But this idea is contingent on me being able to sell the vehicle promptly to a private party.

Thanks again for your thoughts here guys... yes I am a little emotionally attached to this home, but after lots of searching it really is a great deal and hope that we can get creative to make this happen.

that's about 30 to 35% interest on his money good deal for him.. offer the seller a seller carry back at 12% see what that does.

Yeah it is like a 33% interest rate which is a lot, I suspect part of that is because he doesn't know me and doesn't seem to be interested in doing a credit or income verification. Might as well try to talk him down though.
I could be able to get a business loan later this month for roughly $20,000 but the APR wouldn't be much better, probably at least 25%.

0 Reply
Chris M.
OP
Portland, OR · Member since 2016 · 108 posts · 33 votes
7y
Originally posted by @Theresa Harris:
@Chris M. You clearly love your mom and are willing to do everything you can to help her which is great. Selling your car is one idea and buying a good used car. You mentioned in one of your posts that your mom is a veteran. Can she get any help through them?
One other thing to think about is if you stretch yourself too thin, what happens if an unexpected expense comes up with at your home or with your mom's home? I'm assuming you are going to be responsible for any repairs as the home will be in your name and it appears that she has a low income and no savings.

Unfortunately my mom owes a lot in student loans so we can't really get any Veterans benefits that I'm aware of for this process unless there is a program I'm unaware of. You're right about stretching myself too thin... that's why I decided not to use my own cash. It would be a huge chunk of what I have and if something crazy or bad happened with the house it would put me in a very tough situation.
I think selling the vehicle could be a viable option, online my same vehicle is selling for around $23,000, almost the price of the house. But again that means I'd have to really hustle and try to sell the thing within the next couple weeks and I'm currently traveling.

0 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
Originally posted by @Chris M.:
Originally posted by @Jay Hinrichs:
Originally posted by @Chris M.:
Originally posted by @Rob Westerman:
@Chris M. One mistake that I see from the outside looking in is that you are too emotionally attached to this property. Once you get emotionally attached it is hard to make rational decisions. Postpone the closing step back and find a lender that is not family or friend. If that does not work walk away.

That's a fair point and you're right I have become a little emotionally invested mainly because this house will work perfectly for my mom's retirement - just the right size, in great shape but still very affordable, only 1 story and with a nice backyard that she could enjoy.

@Jerry N. @Caleb Heimsoth @Odie Ayaga I have a very interesting update on the situation: my buyer's agent referred me to a gentleman who purchases homes in cash then sells them to the interested buyer via owner financing. He has offered to buy this home for us if we can put $5,000 down, then pay $950 per month (he would pay the property taxes) for 3 years. I've done the math and after he takes care of the taxes this would result in us paying about $35,000 total for the house, or $11,000 more than what we were going to pay, but it would enable us to get the house. It is a significant amount more than we wanted to spend on the house, but it would be spread out over 3 years. Also a little nervous about doing it this way, but my buyer's agent says he's a reputable guy who has done many deals this way. What do you guys think about that? At the very least I think it's good to have as an option.

I'm also considering the option of selling my vehicle which I could probably get at least $20,000 for, then using my excellent credit standing with the auto maker to purchase a newer vehicle with a couple thousand down and monthly payments. Since I would still be paying down the original loan amount on the vehicle, this would basically be like taking out a loan from the auto maker. But this idea is contingent on me being able to sell the vehicle promptly to a private party.

Thanks again for your thoughts here guys... yes I am a little emotionally attached to this home, but after lots of searching it really is a great deal and hope that we can get creative to make this happen.

that's about 30 to 35% interest on his money good deal for him.. offer the seller a seller carry back at 12% see what that does.

Yeah it is like a 33% interest rate which is a lot, I suspect part of that is because he doesn't know me and doesn't seem to be interested in doing a credit or income verification. Might as well try to talk him down though.
I could be able to get a business loan later this month for roughly $20,000 but the APR wouldn't be much better, probably at least 25%.

who name will the home be in.. there are rules if your mom is in title and she is owner occ.. there is usury you may want to check on that in whatever state this is in. which sounds like somewhere in the mid west.. I really think the seller may jump at 5k down and 12% over say 2 years payments the same..
interest rates from private lenders who know what they are doing on small balance deals will always be that high.. at least for non owner occ.

Podcast Guest on Show #222
JLH Capital Partners51 Review
Website View Page
1 Reply
Chris M.
OP
Portland, OR · Member since 2016 · 108 posts · 33 votes
7y
Originally posted by @Jay Hinrichs:
Originally posted by @Chris M.:
Originally posted by @Jay Hinrichs:
Originally posted by @Chris M.:
Originally posted by @Rob Westerman:
@Chris M. One mistake that I see from the outside looking in is that you are too emotionally attached to this property. Once you get emotionally attached it is hard to make rational decisions. Postpone the closing step back and find a lender that is not family or friend. If that does not work walk away.

That's a fair point and you're right I have become a little emotionally invested mainly because this house will work perfectly for my mom's retirement - just the right size, in great shape but still very affordable, only 1 story and with a nice backyard that she could enjoy.

@Jerry N. @Caleb Heimsoth @Odie Ayaga I have a very interesting update on the situation: my buyer's agent referred me to a gentleman who purchases homes in cash then sells them to the interested buyer via owner financing. He has offered to buy this home for us if we can put $5,000 down, then pay $950 per month (he would pay the property taxes) for 3 years. I've done the math and after he takes care of the taxes this would result in us paying about $35,000 total for the house, or $11,000 more than what we were going to pay, but it would enable us to get the house. It is a significant amount more than we wanted to spend on the house, but it would be spread out over 3 years. Also a little nervous about doing it this way, but my buyer's agent says he's a reputable guy who has done many deals this way. What do you guys think about that? At the very least I think it's good to have as an option.

I'm also considering the option of selling my vehicle which I could probably get at least $20,000 for, then using my excellent credit standing with the auto maker to purchase a newer vehicle with a couple thousand down and monthly payments. Since I would still be paying down the original loan amount on the vehicle, this would basically be like taking out a loan from the auto maker. But this idea is contingent on me being able to sell the vehicle promptly to a private party.

Thanks again for your thoughts here guys... yes I am a little emotionally attached to this home, but after lots of searching it really is a great deal and hope that we can get creative to make this happen.

that's about 30 to 35% interest on his money good deal for him.. offer the seller a seller carry back at 12% see what that does.

Yeah it is like a 33% interest rate which is a lot, I suspect part of that is because he doesn't know me and doesn't seem to be interested in doing a credit or income verification. Might as well try to talk him down though.
I could be able to get a business loan later this month for roughly $20,000 but the APR wouldn't be much better, probably at least 25%.

who name will the home be in.. there are rules if your mom is in title and she is owner occ.. there is usury you may want to check on that in whatever state this is in. which sounds like somewhere in the mid west.. I really think the seller may jump at 5k down and 12% over say 2 years payments the same..
interest rates from private lenders who know what they are doing on small balance deals will always be that high.. at least for non owner occ.

Jay, the house will be in my name because my mom is concerned about it being listed under her name when she owes those student loans like they might want to seize it to help pay off the loans. However, that was something I was concerned with: owning the house under my name but my mom being the one who lives there. I do plan on visiting and staying for a few months out of the year (scattered throughout the year) so we could potentially get away with it?
Yeah, that's what I thought on the interest rates from private lenders for small loan amounts like this. I feel like a business loan or selling my vehicle would almost yield the same interest rates this guy is asking. The biggest pro of doing a business loan/selling the vehicle would be that I'm familiar/close to the process and know that it can be trusted. I'm sure this guy is legit but don't know him.

0 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
Originally posted by @Chris M.:
Originally posted by @Jay Hinrichs:
Originally posted by @Chris M.:
Originally posted by @Jay Hinrichs:
Originally posted by @Chris M.:
Originally posted by @Rob Westerman:
@Chris M. One mistake that I see from the outside looking in is that you are too emotionally attached to this property. Once you get emotionally attached it is hard to make rational decisions. Postpone the closing step back and find a lender that is not family or friend. If that does not work walk away.

That's a fair point and you're right I have become a little emotionally invested mainly because this house will work perfectly for my mom's retirement - just the right size, in great shape but still very affordable, only 1 story and with a nice backyard that she could enjoy.

@Jerry N. @Caleb Heimsoth @Odie Ayaga I have a very interesting update on the situation: my buyer's agent referred me to a gentleman who purchases homes in cash then sells them to the interested buyer via owner financing. He has offered to buy this home for us if we can put $5,000 down, then pay $950 per month (he would pay the property taxes) for 3 years. I've done the math and after he takes care of the taxes this would result in us paying about $35,000 total for the house, or $11,000 more than what we were going to pay, but it would enable us to get the house. It is a significant amount more than we wanted to spend on the house, but it would be spread out over 3 years. Also a little nervous about doing it this way, but my buyer's agent says he's a reputable guy who has done many deals this way. What do you guys think about that? At the very least I think it's good to have as an option.

I'm also considering the option of selling my vehicle which I could probably get at least $20,000 for, then using my excellent credit standing with the auto maker to purchase a newer vehicle with a couple thousand down and monthly payments. Since I would still be paying down the original loan amount on the vehicle, this would basically be like taking out a loan from the auto maker. But this idea is contingent on me being able to sell the vehicle promptly to a private party.

Thanks again for your thoughts here guys... yes I am a little emotionally attached to this home, but after lots of searching it really is a great deal and hope that we can get creative to make this happen.

that's about 30 to 35% interest on his money good deal for him.. offer the seller a seller carry back at 12% see what that does.

Yeah it is like a 33% interest rate which is a lot, I suspect part of that is because he doesn't know me and doesn't seem to be interested in doing a credit or income verification. Might as well try to talk him down though.
I could be able to get a business loan later this month for roughly $20,000 but the APR wouldn't be much better, probably at least 25%.

who name will the home be in.. there are rules if your mom is in title and she is owner occ.. there is usury you may want to check on that in whatever state this is in. which sounds like somewhere in the mid west.. I really think the seller may jump at 5k down and 12% over say 2 years payments the same..
interest rates from private lenders who know what they are doing on small balance deals will always be that high.. at least for non owner occ.

Jay, the house will be in my name because my mom is concerned about it being listed under her name when she owes those student loans like they might want to seize it to help pay off the loans. However, that was something I was concerned with: owning the house under my name but my mom being the one who lives there. I do plan on visiting and staying for a few months out of the year (scattered throughout the year) so we could potentially get away with it?
Yeah, that's what I thought on the interest rates from private lenders for small loan amounts like this. I feel like a business loan or selling my vehicle would almost yield the same interest rates this guy is asking. The biggest pro of doing a business loan/selling the vehicle would be that I'm familiar/close to the process and know that it can be trusted. I'm sure this guy is legit but don't know him.

OK then its an investment loan for the lender and most likely usury is moot.. still would try to get the seller to carry back.. that would be simple.

Podcast Guest on Show #222
JLH Capital Partners51 Review
Website View Page
0 Reply
Chris M.
OP
Portland, OR · Member since 2016 · 108 posts · 33 votes
7y
Originally posted by @Jay Hinrichs:
Originally posted by @Chris M.:
Originally posted by @Jay Hinrichs:
Originally posted by @Chris M.:
Originally posted by @Jay Hinrichs:
Originally posted by @Chris M.:
Originally posted by @Rob Westerman:
@Chris M. One mistake that I see from the outside looking in is that you are too emotionally attached to this property. Once you get emotionally attached it is hard to make rational decisions. Postpone the closing step back and find a lender that is not family or friend. If that does not work walk away.

That's a fair point and you're right I have become a little emotionally invested mainly because this house will work perfectly for my mom's retirement - just the right size, in great shape but still very affordable, only 1 story and with a nice backyard that she could enjoy.

@Jerry N. @Caleb Heimsoth @Odie Ayaga I have a very interesting update on the situation: my buyer's agent referred me to a gentleman who purchases homes in cash then sells them to the interested buyer via owner financing. He has offered to buy this home for us if we can put $5,000 down, then pay $950 per month (he would pay the property taxes) for 3 years. I've done the math and after he takes care of the taxes this would result in us paying about $35,000 total for the house, or $11,000 more than what we were going to pay, but it would enable us to get the house. It is a significant amount more than we wanted to spend on the house, but it would be spread out over 3 years. Also a little nervous about doing it this way, but my buyer's agent says he's a reputable guy who has done many deals this way. What do you guys think about that? At the very least I think it's good to have as an option.

I'm also considering the option of selling my vehicle which I could probably get at least $20,000 for, then using my excellent credit standing with the auto maker to purchase a newer vehicle with a couple thousand down and monthly payments. Since I would still be paying down the original loan amount on the vehicle, this would basically be like taking out a loan from the auto maker. But this idea is contingent on me being able to sell the vehicle promptly to a private party.

Thanks again for your thoughts here guys... yes I am a little emotionally attached to this home, but after lots of searching it really is a great deal and hope that we can get creative to make this happen.

that's about 30 to 35% interest on his money good deal for him.. offer the seller a seller carry back at 12% see what that does.

Yeah it is like a 33% interest rate which is a lot, I suspect part of that is because he doesn't know me and doesn't seem to be interested in doing a credit or income verification. Might as well try to talk him down though.
I could be able to get a business loan later this month for roughly $20,000 but the APR wouldn't be much better, probably at least 25%.

who name will the home be in.. there are rules if your mom is in title and she is owner occ.. there is usury you may want to check on that in whatever state this is in. which sounds like somewhere in the mid west.. I really think the seller may jump at 5k down and 12% over say 2 years payments the same..
interest rates from private lenders who know what they are doing on small balance deals will always be that high.. at least for non owner occ.

Jay, the house will be in my name because my mom is concerned about it being listed under her name when she owes those student loans like they might want to seize it to help pay off the loans. However, that was something I was concerned with: owning the house under my name but my mom being the one who lives there. I do plan on visiting and staying for a few months out of the year (scattered throughout the year) so we could potentially get away with it?
Yeah, that's what I thought on the interest rates from private lenders for small loan amounts like this. I feel like a business loan or selling my vehicle would almost yield the same interest rates this guy is asking. The biggest pro of doing a business loan/selling the vehicle would be that I'm familiar/close to the process and know that it can be trusted. I'm sure this guy is legit but don't know him.

OK then its an investment loan for the lender and most likely usury is moot.. still would try to get the seller to carry back.. that would be simple.

Hey, Jay, sorry, I should have clarified: if I purchase the home with a business loan or by selling my vehicle, the house would be my name. If I use this owner financing guy, we would sign a new contract and the house would be in his name.
Man this is stressful. I think getting creative on my own and piecing together the $24,000 over the next few weeks would be the best way to do it, assuming the seller is okay with delaying the closing that long.

0 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
Originally posted by @Chris M.:
Originally posted by @Jay Hinrichs:
Originally posted by @Chris M.:
Originally posted by @Jay Hinrichs:
Originally posted by @Chris M.:
Originally posted by @Jay Hinrichs:
Originally posted by @Chris M.:
Originally posted by @Rob Westerman:
@Chris M. One mistake that I see from the outside looking in is that you are too emotionally attached to this property. Once you get emotionally attached it is hard to make rational decisions. Postpone the closing step back and find a lender that is not family or friend. If that does not work walk away.

That's a fair point and you're right I have become a little emotionally invested mainly because this house will work perfectly for my mom's retirement - just the right size, in great shape but still very affordable, only 1 story and with a nice backyard that she could enjoy.

@Jerry N. @Caleb Heimsoth @Odie Ayaga I have a very interesting update on the situation: my buyer's agent referred me to a gentleman who purchases homes in cash then sells them to the interested buyer via owner financing. He has offered to buy this home for us if we can put $5,000 down, then pay $950 per month (he would pay the property taxes) for 3 years. I've done the math and after he takes care of the taxes this would result in us paying about $35,000 total for the house, or $11,000 more than what we were going to pay, but it would enable us to get the house. It is a significant amount more than we wanted to spend on the house, but it would be spread out over 3 years. Also a little nervous about doing it this way, but my buyer's agent says he's a reputable guy who has done many deals this way. What do you guys think about that? At the very least I think it's good to have as an option.

I'm also considering the option of selling my vehicle which I could probably get at least $20,000 for, then using my excellent credit standing with the auto maker to purchase a newer vehicle with a couple thousand down and monthly payments. Since I would still be paying down the original loan amount on the vehicle, this would basically be like taking out a loan from the auto maker. But this idea is contingent on me being able to sell the vehicle promptly to a private party.

Thanks again for your thoughts here guys... yes I am a little emotionally attached to this home, but after lots of searching it really is a great deal and hope that we can get creative to make this happen.

that's about 30 to 35% interest on his money good deal for him.. offer the seller a seller carry back at 12% see what that does.

Yeah it is like a 33% interest rate which is a lot, I suspect part of that is because he doesn't know me and doesn't seem to be interested in doing a credit or income verification. Might as well try to talk him down though.
I could be able to get a business loan later this month for roughly $20,000 but the APR wouldn't be much better, probably at least 25%.

who name will the home be in.. there are rules if your mom is in title and she is owner occ.. there is usury you may want to check on that in whatever state this is in. which sounds like somewhere in the mid west.. I really think the seller may jump at 5k down and 12% over say 2 years payments the same..
interest rates from private lenders who know what they are doing on small balance deals will always be that high.. at least for non owner occ.

Jay, the house will be in my name because my mom is concerned about it being listed under her name when she owes those student loans like they might want to seize it to help pay off the loans. However, that was something I was concerned with: owning the house under my name but my mom being the one who lives there. I do plan on visiting and staying for a few months out of the year (scattered throughout the year) so we could potentially get away with it?
Yeah, that's what I thought on the interest rates from private lenders for small loan amounts like this. I feel like a business loan or selling my vehicle would almost yield the same interest rates this guy is asking. The biggest pro of doing a business loan/selling the vehicle would be that I'm familiar/close to the process and know that it can be trusted. I'm sure this guy is legit but don't know him.

OK then its an investment loan for the lender and most likely usury is moot.. still would try to get the seller to carry back.. that would be simple.

Hey, Jay, sorry, I should have clarified: if I purchase the home with a business loan or by selling my vehicle, the house would be my name. If I use this owner financing guy, we would sign a new contract and the house would be in his name.
Man this is stressful. I think getting creative on my own and piecing together the $24,000 over the next few weeks would be the best way to do it, assuming the seller is okay with delaying the closing that long.

your confused.. if the seller gives you a seller carry back YOU OWN THE HOUSE.. the SELLER becomes the BANK.. if they will go for it
If they want to do a Contract for deed then yes the home remains in the sellers name until you make the last payment there are some inherent risks with CFDs mortgage and note is better for you.

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3 Reply
Neal Collins
Developer · Portland, OR · Member since 2014 · 732 posts · 490 votes
7y
@Chris M.
@Jay Hinrichs has been repeating two solid options without needing to completely overwhelm your life.
1. A Seller carried transaction with a a short amortization period and healthy interest rate to get the deal done is a solid plan.
2. Friends and family money to find cash in exchange for the same like of Note terms as the seller financed route in exchange for a first position lien. You’d be surprised at how many folks have $25k stashed under a mattress that they don’t mind putting to work for two years or so.
1 Reply
Chris M.
OP
Portland, OR · Member since 2016 · 108 posts · 33 votes
7y
Originally posted by @Jay Hinrichs:
Originally posted by @Chris M.:
Originally posted by @Jay Hinrichs:
Originally posted by @Chris M.:
Originally posted by @Jay Hinrichs:
Originally posted by @Chris M.:
Originally posted by @Jay Hinrichs:
Originally posted by @Chris M.:
Originally posted by @Rob Westerman:
@Chris M. One mistake that I see from the outside looking in is that you are too emotionally attached to this property. Once you get emotionally attached it is hard to make rational decisions. Postpone the closing step back and find a lender that is not family or friend. If that does not work walk away.

That's a fair point and you're right I have become a little emotionally invested mainly because this house will work perfectly for my mom's retirement - just the right size, in great shape but still very affordable, only 1 story and with a nice backyard that she could enjoy.

@Jerry N. @Caleb Heimsoth @Odie Ayaga I have a very interesting update on the situation: my buyer's agent referred me to a gentleman who purchases homes in cash then sells them to the interested buyer via owner financing. He has offered to buy this home for us if we can put $5,000 down, then pay $950 per month (he would pay the property taxes) for 3 years. I've done the math and after he takes care of the taxes this would result in us paying about $35,000 total for the house, or $11,000 more than what we were going to pay, but it would enable us to get the house. It is a significant amount more than we wanted to spend on the house, but it would be spread out over 3 years. Also a little nervous about doing it this way, but my buyer's agent says he's a reputable guy who has done many deals this way. What do you guys think about that? At the very least I think it's good to have as an option.

I'm also considering the option of selling my vehicle which I could probably get at least $20,000 for, then using my excellent credit standing with the auto maker to purchase a newer vehicle with a couple thousand down and monthly payments. Since I would still be paying down the original loan amount on the vehicle, this would basically be like taking out a loan from the auto maker. But this idea is contingent on me being able to sell the vehicle promptly to a private party.

Thanks again for your thoughts here guys... yes I am a little emotionally attached to this home, but after lots of searching it really is a great deal and hope that we can get creative to make this happen.

that's about 30 to 35% interest on his money good deal for him.. offer the seller a seller carry back at 12% see what that does.

Yeah it is like a 33% interest rate which is a lot, I suspect part of that is because he doesn't know me and doesn't seem to be interested in doing a credit or income verification. Might as well try to talk him down though.
I could be able to get a business loan later this month for roughly $20,000 but the APR wouldn't be much better, probably at least 25%.

who name will the home be in.. there are rules if your mom is in title and she is owner occ.. there is usury you may want to check on that in whatever state this is in. which sounds like somewhere in the mid west.. I really think the seller may jump at 5k down and 12% over say 2 years payments the same..
interest rates from private lenders who know what they are doing on small balance deals will always be that high.. at least for non owner occ.

Jay, the house will be in my name because my mom is concerned about it being listed under her name when she owes those student loans like they might want to seize it to help pay off the loans. However, that was something I was concerned with: owning the house under my name but my mom being the one who lives there. I do plan on visiting and staying for a few months out of the year (scattered throughout the year) so we could potentially get away with it?
Yeah, that's what I thought on the interest rates from private lenders for small loan amounts like this. I feel like a business loan or selling my vehicle would almost yield the same interest rates this guy is asking. The biggest pro of doing a business loan/selling the vehicle would be that I'm familiar/close to the process and know that it can be trusted. I'm sure this guy is legit but don't know him.

OK then its an investment loan for the lender and most likely usury is moot.. still would try to get the seller to carry back.. that would be simple.

Hey, Jay, sorry, I should have clarified: if I purchase the home with a business loan or by selling my vehicle, the house would be my name. If I use this owner financing guy, we would sign a new contract and the house would be in his name.
Man this is stressful. I think getting creative on my own and piecing together the $24,000 over the next few weeks would be the best way to do it, assuming the seller is okay with delaying the closing that long.

your confused.. if the seller gives you a seller carry back YOU OWN THE HOUSE.. the SELLER becomes the BANK.. if they will go for it
If they want to do a Contract for deed then yes the home remains in the sellers name until you make the last payment there are some inherent risks with CFDs mortgage and note is better for you.

Got it. I just asked him if he would be willing to do a seller carry back with $5,000 down at a 12% interest rate over 2 years. Something tells me he won't be interested since he'll only make $2,500 on the deal but who knows? Worth asking. Will reply here with his response. Thanks again for the info, Jay.

0 Reply
Chris M.
OP
Portland, OR · Member since 2016 · 108 posts · 33 votes
7y
Originally posted by @Neal Collins:
@Chris M.
@Jay Hinrichs has been repeating two solid options without needing to completely overwhelm your life.
1. A Seller carried transaction with a a short amortization period and healthy interest rate to get the deal done is a solid plan.
2. Friends and family money to find cash in exchange for the same like of Note terms as the seller financed route in exchange for a first position lien. You’d be surprised at how many folks have $25k stashed under a mattress that they don’t mind putting to work for two years or so.

Thanks, Neal, hoping this guy might be open to it. You guys have been extremely helpful. I will keep brainstorming ideas. It is possible if we can delay the closing by a few weeks that I could get really creative and piece together the $24,000 in other means by selling things, getting small personal loans etc. but if this guy could do a 12% interest seller carry back for 2 years with 5k down that would be great.

0 Reply
Chris M.
OP
Portland, OR · Member since 2016 · 108 posts · 33 votes
7y
The owner financing guy said he cannot do a seller carry back due to new laws that were passed that require any seller carry back to be a fully amortized 30 year loan :(
0 Reply
Account Closed
Contractor · San Diego, CA · Member since 2018 · 432 posts · 221 votes
7y
@Chris M. Check Prosper lending. It’s peer to peer. There’s some successful investors that have done tons of deals w peer to peer loans. You might be able to piece it together like you said if thy will extend and you can get maybe 10-20k peer to peer. The sooner you pay those off, the less interest you pay. I’m SE too and I got $15k recently to close a house using my first peer to peer loan. Prosper was the most workable, just expect a $700 initiation fee or something that they take out of the front end of the loan. Worth a try
0 Reply
Jerry N.
Chicago, IL · Member since 2016 · 172 posts · 38 votes
7y
I would be very wary of the guy who will buy the house for you and then finance it. It may be a very one-sided contract, you come up a penny short or a day late and he keeps the house and everything you have paid. You definitely want your own lawyer, not a referral from him or your agent that referred you to him. The finance guy (this middle man your agent introduced you to) has restrictions that do not apply to true owner financing. By law he, the middleman, is considered a lender and needs to follow lending laws. Details about that are in the last two links I included below. You can never be 'sure' any non tradition lender is legit. They may be able to do the funding, but the only thing you know for sure is that they are interested in making money.
I think most people here were suggesting to offer the current owner/seller, not the middleman, the 12% 2-3 year term. If you consider the fact that your best deal currently available is about $35k as a 3 year total, you can easily sweeten the deal with the current owner/seller. If you had to pay the seller $30k all in over a 2-3year period and you got title at closing with the seller having a note that gives you the best position to keep from being burned. Be sure the offer from your agent is presented as we will pay you X ($28,000 or $30,000) and here is when/how you get it ($5,000 now the balance monthly over 3 years, or whatever you can negotiate).
Attached are links to a few articles to give you some background. Whatever path you choose be SURE to use an independent lawyer from the other parties involved. You need a lawyer who is looking out for your interest alone. The Note and Trust Deed seems like the go to solution for Oregon seller financing. The first to links give info on the Note and Trust Deed.
It seems like a good path forward would be 1) get the seller to agree to extend closing (if not already done) 2) sweeten the deal as much as it takes with the seller (it provides you the best protection and should still be the lowest cost option that this point).
It isn't clear where the property is, but below are a couple links for Oregon and a couple on federal lending laws. Different states have different rules.
https://certifiedrealty.com/wp...
https://oregonsellerfinancing....
https://www.nar.realtor/the-sa...
http://www.heltzel.com/resourc...
3 Reply

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