Delayed financing based of appraisal rather than purchase price

[Lior Shulstein]

Hey everyone,

Has anyone here completed a delayed financing deal on a property with little to no rehab?

We’re looking at a property we could potentially purchase(Cash+Private money loan) at a significant discount compared to comps. My main question is: with delayed financing, is it realistic for the appraisal to come in well above the purchase price?

For example:

• Purchase price: $100K

• Comps suggest: ~$150K

Has anyone been able to get an appraisal at the higher comp value (e.g., $150K) and then secure a DSCR loan based on that figure - without doing rehab work?

Would love to hear about any real experiences with this, especially in the Indianapolis market.

Thanks!

Leor 

[Patrick Roberts]

You're mixing up two different products. Delayed financing functions like a cashout refi but is technically a purchase loan. It will be based on the original purchase terms, and there cannot be any liens/funding on the original purchase. It must be a cash purchase. You will have to use the lower of the purchase price or the appraisal as the basis for the loan LTV.

Obtaining a new loan after purchase based on the new appraised amount (not the purchase amount) and having used a private loan to complete the initial purchase would be a cashout refi. You would need 3-6 months on title in most cases.