Real Estate Agent · Weatherford, TX · Member since 2011 · 726 posts · 284 votes
I have a great client who is in need of $85k - $150k to complete the purchase of a property in Granbuy she intends to build an addition onto and then live in.
Buying property for $140k. Has $75k already. Needs $65k plus closing costs to purchase. Addition costs are around $90k for everything. All of that doesn't have to be completed prior to them moving in. About $50k gets her into the house with the other $40k in new garage, driveway & patio upgrades.
She will be listing her current residence for sale. It is free and clear, market value in the $200-225k range. I have comps to support.
She needs to purchase the new house and start repairs before her house sells so she has a place to stay while the addition is being completed.
$85k would get the new property bought with 20% towards the addition. At this amount she'd have to sell her house with a lease back until additions are finished. Makes it harder to sell.
At $150k loan, she can get the addition done and move in before she lists her house, netting her more in the long run.
I'm no expert on lending money and there are folks like @Grant Kemp and Jay Hinrichs that could answer this better, but this looks like a primary residence loan which would implicate all sorts of federal rules and regulation (RMLOs, etc.). Is this not so? Happy to be wrong.