Updated over 9 years ago on . Most recent reply
Seller financing issues
Hello all,
So I think I've landed my first zero down situation, or pretty closely at least. The individual I purchased my first property from is selling another just down the road, the pro forma provided is as follows:
Rent Roll
| 507 Clay | 525 |
| 509 Clay | 700 |
| 511 Clay | 500 |
| 513 Clay | 550 |
Income & Expenses
| Yearly Gross Income | $27,300 |
| Taxes | $2,403 |
| Insurance | $1,180 |
| Water/Sewer | $1,090 |
| Utilities | Tenants Pay |
| R&M | $1,440 |
| Total Expenses | $6,113 |
| NOI | $21,187 |
I have confirmed all the expenses as far as taxes, insurance, and water go, and minus 10% management, 10% CAPEX, and increase the R&M to 10% its actual NOI should be around $16,000 before mortgage payment, estimated @ $500 a month leaving $10,000 a year in positive cash flow.
It was appraised less than three months ago for $117,000. I asked and he agreed to provide a second note, with no lien on the property, for the down payment if I agreed to pay the full appraisal amount. He agreed to let me pay "whatever works" for me, I suggested around $200 a month and he agreed, leaving almost $7600 a year in cash flow.
So I have a practically zero down situation, that will put money in my pocket every month but I am stuck because the bank want lend to me. My DTI is 41%, my monthly W2 income is over $5000, my credit score is over 750 and I have $30,000 in cash and liquid funds, but still nothing. The bank wants 25% down, 6 months of reserves for all my properties (3), as well as $6000 for closing costs. They want to see nearly $60,000 in cash and liquid funds before they will give me a loan which seems a bit crazy to me.
Any suggestions?
I have heard that HML can provide proof of funds letters, should I reach out to them and see if they can provide one for me?