All Forum Posts by: Wilson Lee

Bruce.  Don't want to deal with mortgage insurance?  I understand that.  The short answer is no. Here is some more info of the types of loans you may see out there.

First off, there is 3 loan types lenders may try and offer you: a commercial loan, a delayed financing loan or, a home equity loan/HELOC

A Commercial loan is done trough your LLC. They are often 5 year terms that are amortized over 15+ years. The advantages is that you can often state your own terms to the lender. They can tailor a loan to your needs. The loan is recorded on the LLC's credit and not your own. (unless you default). The down side is in 5 years you will need a new loan when the balloon payment comes up. Also, the product cost a bit more. Getting the loan is no cake walk too. You will need strong financials. I would try this first though.

Delayed financing loan is a loan the bank will offer when you already paid in cash. The sticking point here to know is, the loan will be based on purchase cost rather than market value (aka ARV). Many lenders want you to hold the home for 6 months before they will let you use the market value of your home (via a new appraisal). But! there are exceptions, Some banks will let you skip the 6 month rule and use a new appraisal value if there was extensive rehab. So ask! They are often for 15+ years terms up to 35 years in come cases.

Home equity and HELOC. This loan just pulls equity out they are normally 5 year terms but you can some times negotiate the amortization. The HELOC is a revolving line. They are often much easier to get, assuming they have first position. Some banks will use a new appraisal, Others will still only do to cost.

Here is a neat trick, Go to a small bank and first get a home equity loan.  Ask them to give you a full mortgage in 6 months based off the new appraisal. Ask them to wave all the normal closing fees of the full mortgage b/c you a getting a equity loan with them now.    My bank was able to reuse the first appraisal and waved all the closing fees.  It worked out well for us. Just go ask for it.

The seller should demand a mortgage be filed.  You will also need to be in compliance with Dodd-Frank rules for owner financing. 

If you find a deal where the seller still has a mortgage on it, Try a lease with a separate purchase agreement. Scheduled the closing far off when his mortgage is paid for. That would avoid any messy subject to purchases that trigger the dew on sale clause.

No cash on hand hum? Owner occupied or creative financing is your only viable options today.  Both have their own issues and benefits.  You can search the forms to get more info.  You will still need cash.  My spouse and I was in the same boat just 2 years ago.  We got on a budget and gave up a few things we enjoyed for that time.  

It may be better time spent to find ways to max your w2 income and address your spouce's credit. 

All your money is tied up in it.

Well, how do you image this LLC buying the property? Will your partner give you "x" amount cash for %50 of the cash flow?

If that is the case, You are only paying for the formation of the LLC and cost to record a new quit claim deed (+ any taxes). It should be inexpensive. Unless you have a mortgagee with a dew on sale clause.

If you have a dew on sale clause, you can just ask the bank if they will let you move the title in to an LLC and keep you as a guarantor. The worst they can say is no. The only remaining option would be to get a new mortgage for the LLC with you and your partner.

You don't need a "agent" for that.  FISBO would work. You just need a closing attorney.

It could be more worth your time to look for other options.  If some would will go 50/50 with you on this house.  They will do the same on a new project.

Look in to personal loans or lines of credit too.  Buy in cash on a value add project then cash out refinance.

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My closing cost for about $3000 on a 125,000 loan amount

There must be something in that law that allows for maintenance of such systems. As for a slow response by the HOA, Check the HOA rules for that condo, there must be some kinda of recourse for you if they drag out the repairs.

I got one. Owner occupied FHA loan on a 4 unit building.

Finance of America Mortgage, LLC

1) buy it as is. There is 60,000 in equity after the repairs and mortgage is paid off.  Leave some money on the table for the sellers.  Keep a 30% equity position for your self so you can do a refi and pull your money out.  Some one will finance this for you if you don't have the cash.  Talk to a hard money lender if you must.

2) short sale.  If the lender will go along, Buy it for less than it is owed.  But that many not be needed here.

3) Get it under contract for one the the above terms and assign the contract over in a whole sale deal.

Yeap,  But I first though the OP was saying $3,500 was the annual lot rent.  I leap before looking. 

But we should not even be using 3,500 per month as the income, If he is going to own the homes, He was more operating expenses that need to come out of that.

A title company pulls the title history form the local court house.  They verify that the title has no claim by a 3rd party against it.  ie, a 2nd mortgage took out by the last owner.  In that example,  The 2nd mortgage holder would need to be paid.  Which is bad for you.  

Title insurance is issued by to title company promising the title is free of such claims.  and If they are wrong, they pay, not you up to the policy limit.