All Forum Posts by: Bobby Holley

My wife and I recently showed up at an open house the same time as another family.  I found out that the family loves the neighborhood and they love the schools that feed that neighborhood.  Their purchasing budget is $280k - $300k.  The comps in the area range from $220k - $280k.

I have a friend in the same neighborhood who needs to relocate to Charleston, SC because of his job.  He is already working and living in Charleston and his wife is trying to sell the home, preferably by June.  They want to sell the home AS IS because they don't have enough time or cash to do what's necessary (and they want to keep the agent commissions to themselves).  Their AS IS asking price is $200k.  We estimate they would have to spend more than $30k on renovations to make it an attractive purchase on the retail market.  They currently owe less than $120k on the mortgage.

My goal is to buy the house from them while simultaneously receiving a bank approval letter from the aforementioned prospective buyer on a purchase price that meets their budget and our desired return.

I want to avoid going the hard money route. Right now I have been approved for a HELOC that would provide about $24k for a downpayment which means I would need to finance an 85/15 LTV just to get a $160k loan. My ideal scenario RIGHT NOW would be to offer $160k to the seller, offer the prospective buyer $30k - $40k in renovations of their choosing in exchange for a purchase price of $260k.

Any creative thoughts on this deal, financing, etc I would love to hear them.  Thanks.

@Percy N.It's a Navy Federal Credit Union HELOC.

I was recently approved for a $50,000 HELOC at an extraordinarily high 8% for 480 months. I'm paying off a current $27,000 HELOC at 4.75%. Is it possible that I can agree to this new HELOC and turn around and get it refinanced? If so, how long might it take and what rate do you think I could get?

 Great thinking.  Appreciate the feedback.

Recently a developer began marketing 10 homes in a 70 lot subdivision. The homes range in price from $200k - $300k. The subdivision is located inside my farm market and within a mile of my initial house flip ($275k ARV) I expect to close on this month. How do you see the new development affecting my target area and the buyer market once I finish rehab, hopefully this February?

Also, this subdivision is across the main highway from a friend who lives on a 21 acre property adjacent to a subdivision he developed, himself.  He has sold 12 of the 17 lots with the value of the houses ranging from $400k - $700k.  My friend is 81 and progressing toward retirement.  I am considering moving into the developer space if the undeveloped lots have value.  How do you think the new subdivision would impact the prospects for finishing that development?

The community is suburban Atlanta and has many quality neighborhoods and is anchored by a great school district.

 I like your thinking.  That sounds logical to me.  Do I retain ownership so that I can fix and flip the house?

 My goal is to only have as much skin in the game as is necessary.  Using your theory why don't I put in 70% or 80% and get a loan for the difference.  My skin surrounds my brain and its ability to work through scenarios that benefit me AND the house seller.  By the way, there are programs I think you're aware of where the bank does a 100% loan to the buyer.  Think before you pop off.  And you do it often.  Stay humble.

A wrap around loan seems like it has the possibility of working under the scenario I posed.  Can anyone confirm whether the wrap around loan might work?

Here's the scenario: I am purchasing a house from a seller for $198,000. He owes $158,000 on the mortgage. Can I get a loan for $198,000 and instead of putting 20% (roughly $40,000) down with the lender will the lender allow the seller to finance the downpayment after paying off the mortgage?

Here's the scenario: I am purchasing a house from a seller for $198,000. He owes $158,000 on the mortgage.  Can I get a loan for $198,000 and instead of putting 20% (roughly $40,000) down with the lender will the lender allow the seller to finance the downpayment after paying off the mortgage?