No Conv Financing Strategy

3 Replies


I have this property in Texas that is owned free and clear currently being rented by a contractor who has done some work for us. 

There is much disagreement about late payments and work they claim they have done to the house, etc. They want to buy it from me for $60k if they can get financed....A disaster story for another forum. 

Anyway the house is in great shape and worth $120k. I just want out of this property altogether and/or if I can pull $60k out of this I would be fine. 

So how can I do this given their credit/finances are a mess and could take some time to fix, if they ever do. 

1. Find some type of private lender willing to do a flexible no doc loan at 50% ltv for them. 

cons - Given they are a consumer without adequate ability to repay it could be tough

2. Refinance out $60k and sell it to them on either a land contract or wrap

cons - land contracts are no no's in texas. Wraps have pitfalls especially ones originated so quickly?

3. Refinance out $60k and just keep them in as renters telling them they are free to purchase anytime for $60k or until I figure out something else. 

not a bad option.

Are there any no doc, asset only 50% ltvs for investor owned properties? I don't want to go the conventional route.

There is little chance that the current tenant will be able to purchase.... he apparently still has a renters mentality which will remain while you try to push this rope. Sell it to an investor who will close it quickly and not need financing. It's time to face the reality that the tenant isn't going to be a homeowner regardless of how hard you want him to be. There are easier ways to solve this problem.   

@Travis Moore - seems like option #3 would be your best bet. If you have a lease with this tenant and the DSCR is at least 1.2 then a 50% LTV loan should be no issue. Assuming no major issues with you as a borrower or title.

PM if you need assistance.

Better make sure he signs an unconditional release of lien, he wields a powerful tool over your property if you try to sell to someone else.

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