All Forum Posts by: Bruce Thomas
Bruce Thomas has started 15 posts and replied 55 times.
I am sure there is more but I ran into Chris Bruce, mrflipperhouse and Stephani Davis
If you go under fileplace there should be a couple of purchase and sale agreements for wholesalers.
Post: Commercial Down Payment Assistance Programs
- Oklahoma City, OK
- Posts 57
- Votes 9
Originally posted by @Jon Holdman:
Do you disclose to the first mortgage lender that there is a second mortgage? Or do you claim the down payment you're borrowing from this DPA company is your own money? Commercial loans aren't the same as residential, though. On a residential loan if you didn't disclose your down payment was borrowed you'd be committing loan fraud. With commercial that's not always the case. That said, still better to disclose the hide.
I think you still have to come up with $50K out of pocket in your example. You're claiming the purchase price is $1 million when its really $750K. You're getting a $750K first and a $250K second. That lets you close, though you'll have to cover your side of closing costs out of pocket. After costs, the seller would get maybe $930K (based on your numbers). After closing, the DPA company want's $280K. That leaves the seller with $650K. That's $50K sort of the $700K they were expecting based on the true $750K purchase price and $50K in costs. So you're going to have to come up with that $50K.
Thanks Jon
Post: Commercial Down Payment Assistance Programs
- Oklahoma City, OK
- Posts 57
- Votes 9
Any thoughts?
Post: Commercial Down Payment Assistance Programs
- Oklahoma City, OK
- Posts 57
- Votes 9
Example from fbcfunding.com
How the DP Program Works
- Willing Seller
- Property with Substantial equity
- Contract is written for value of the property (seller will receive agreed upon net amount)
- Third Party DPA Company or private investor sends funds to escrow for closing (from buyer).
- Escrow title company sends DP funds plus fee back to 3rd party company at disbursement of escrow (from seller).
Example:
- PropertyValue: $1,000,000
- Loan amount: $750,000
- Seller to net: $700,000
- Down Payment: $250,000 from 3rd party DPA Company
- DPA Fee: $30,000
- Return to DPA Company from escrow: $280,000
- Balance for additional closing costs: $20,000
- Net to Seller: $700,000
This is better then me rattling off. :)
Post: Commercial Down Payment Assistance Programs
- Oklahoma City, OK
- Posts 57
- Votes 9
Originally posted by @Rob Beland:
Is what legit? Could you provide more details?
It is seller funded (creative financing). It has to be equity in the property before purchase and that is what the lender uses and other fees to count as a down payment for the buyer and it is put into an escrow account to be dispersed at the time of closing. Something to that effect. :)
Post: Commercial Down Payment Assistance Programs
- Oklahoma City, OK
- Posts 57
- Votes 9
Is this legit and has anyone bought a property with this method?
Post: Contract Clause
- Oklahoma City, OK
- Posts 57
- Votes 9
Originally posted by @Joel Owens:
Have you signed and LOI or purchase and sale agreement?? LOI is typically non-binding on each party unless it says so.
If you have already executed a purchase and a sale without a broker or an attorney looking at it and you do not have the experience that was a bad move.
There are usually inspection periods built in and a finance contingency where you keep all your EM but it varies what is in the contract. Hopefully you are not letting the sellers attorney, title company, or the seller hold the EM. Even if per the contract you are due it they can be very difficult in trying to get it back and sometimes force you to go to court if the EM provision is worded a certain way.
If you no longer want to buy this property and want to get out of it or want to buy if the seller reduces you really need to know what you signed and what your outs are before making such a move. Might be a good idea to let an attorney for a few hundred look at it for an hour consultation.
No legal advice given.
Thanks. I was wondering about this before I signed a or got to the point of have one written up. Your advice is greatly appreciated. Thanks again.
Post: Reserves
- Oklahoma City, OK
- Posts 57
- Votes 9
Thanks Joel.
Post: Contract Clause
- Oklahoma City, OK
- Posts 57
- Votes 9
What is a clause I can use if I have already signed the purchase agreement but the numbers or physical dd doesn't pan out? Or if I can not come up with the money (loan approval) I don't want to be legally liable. Thanks.