Do you ever lend 100% for purchase?

[Daniel Packard]

Hi All, 

Would you lend 100% for the purchase price, if, the house is being purchased cheaply. For example, the house would sell on market for 160,000, but the sellers just want to get rid of it, and agree to sell for 100,000.  As a private lender would you pay the full 100%, or still do 75% Loan to Purchase price and have borrower put money in?

[Don Konipol]

Quote from @Daniel Packard:

Hi All, 

Would you lend 100% for the purchase price, if, the house is being purchased cheaply. For example, the house would sell on market for 160,000, but the sellers just want to get rid of it, and agree to sell for 100,000.  As a private lender would you pay the full 100%, or still do 75% Loan to Purchase price and have borrower put money in?

I might do a deal where I purchased the property and provided the “buyer” worth an option to buy for the period of the loan with monthly 
rent” payments equal to the interest payments on the would be note.  This way if default occurred I would not have to go through foreclosure.  The problem with the scenario isn’t that the loan to value is out of wack, it’s that the buyer has no “blood” in the deal, and can psychologically more easily walk away.  
An exception may be someone with a VERY strong personal financial statement.

 Finally, while on rare occasions real property does change hands a an extreme discount to market value, in the vast majority of the time a buyer, especially one without much experience thinks they’ve stump;ed across the “deal of the century”, they’ve mispriced the actual value because of something not readily apparent hasn’t been considered.  And I’ve seen many appraisals, far off the mark as well.