All Forum Posts by: Steph C.

Hi,

We're looking at a house that can be converted from septic to city sewer. Anyone know of an approximate cost? Just looking for a range. The house is in MA, by the way.

Thanks,
Steph

Thanks, Curt. I appreciate the advice. We are looking to sell quickly after the rehab is complete.

Are you saying that the bank wanting the downpayment amount in the pre-approval letter is typical? Even most hard money lenders want some skin in the game, which makes sense, but why is the bank so concerned with my downpayment amount just to make an initial offer, knowing full well there are inspection contingencies and they also are going to counter the offer? BTW, we offered what we wanted to pay (about 65% of ARV), which is not close to the asking price.

I realize that if they get a cash offer, we don't stand a chance anyway, but it seems odd that the Agent will not even submit our offer to the bank without the downpayment info in the letter.

Thanks,
Steph

Hi, I called it a "proof of funds" letter, but I should have called it a "pre-approval" letter. Sorry, it's been long day!

I'm not making a cash offer, it's an offer that will be financed by a hard money lender for purchase and rehab. The letter I submitted from my lender outlined the terms of their loan, the max LTV, the amount they would loan, the due diligence they would do, etc. But, two versions of their letter were rejected because it didn't state the downpayment info.

We explained that the lender would specify the downpayment amount upon acceptance of the final offer, but that still didn't float.

Thanks,
Steph

Hello,

We submittted an offer on Friday for an REO for a rehab deal. We included our $1000 earnest money, a valid p&s and all other requirements via our Realtor. We also had a proof of funds letter from a well established rehab lender.

The Agent that deals with the bank has not submitted our offer yet because our proof of funds letter did not state a specific amount or percentage as our downpayment. The lender did a revised letter for me (which I submitted but was again rejected), but did not give a specific amount for a downpayment, because this is just a letter to submit the offer, and the final purchase price will likely change (primarily because the offer is subject to a Title V inspection, which if the septic system doesn't pass, the cost for replacement would be about $25k to $30k for a house this size, and we would lower our offer accordingly).

Anyway, I know full well the bank is going to counter and they may even counter to a price we won't accept. That being said, I cannot understand why they won't even submit the offer to the bank. Has anyone heard of this?

I have been trying hard today to get a lender to give me a proof of funds letter that would show a downpayment amount (even if it shows a % amount, not a dollar amount), but I haven't had luck yet. I've talked to some really great people today, however, none so far were able to help me in my specific situation.

Back a while ago, we successfully purchased a HUD house and I didn't have to jump through hoops to get a "special" proof of funds letter. The one I submitted (which said nothing about a downpayment) was accepted.

Any thoughts or suggestions? Do I walk away because this bank is going to make my life difficult (it's not BoA, FYI)? :-)

I know people who use any old "flash funding" proof of funds letter and don't get this much hassle from a bank to just make an offer.

Steph

Thanks, Jim, for the tips. I picked up a lot of good solutions for removing pet odors here on BP.

We didn't get the house. Apparently the smell of cat pee brings out tons of cash buyers, so we missed out! :-) But, we'll keep looking.

Steph

We just looked at a "cat house" today. All rooms downstairs have been ripped down to the bare floor or subfloor. The floors and lower walls look to be sprayed with a white substance (similar to what I've seen in a mold remediation). However, the smell still was unbelievable (I swear I can still smell it).

The upstairs and basement didn't smell as bad as the first floor of the house.

The house is way overpriced, but even if we got it for as cheap as we'd be willing to pay, I do wonder if you really can truly eliminate the smell? It's the typical "ugliest (and smelliest) house on the street" in a really cute neighborhood.

Thanks,
Steph

Hello,

I would like to add some BP members to my buyers list.

If you're interested in purchasing single or multi family properties in Southeastern MA (primarily Bristol County, sometimes in Norfolk County), please reply with a post, send me a PM or you can use the investor form on my website (link below).

Please let me know the types of properties you are looking for, the types of repairs you'll consider, price ranges and in which cities/towns you like to purchase.

Thanks for your interest.

Happy Investing!
Steph

Thanks, Bill. I'm glad I was on track and correct in my assumptions.

I appreciate your help,
Steph

Hi Everyone,

I have a couple questions regarding wholesaling a HUD property.

I know there are seasoning requirements (90 day) and that supposedly you cannot sell for more than 120% of the purchase price. However, I cannot get exact/clear details regarding wholesaling a HUD to an investor.

I assume if my buyer is not a homeowner/Fannie/FHA buyer, the above rules would not apply? Is that correct? If my end buyer is a cash buyer, do either of the above restrictions apply?

I would plan to do transactional funding to close and then selling to an end buyer. I suppose I could also close in an LLC (one set up for this purpose) and sell the interest, but since LLCs in MA are over $500 to set up (state fees only), I doubt I'd go that route.

Also, the last time we successfully bought a HUD house was over 10 years ago (and we had a 203k loan). We made an offer of about 80% of asking price (not ARV), which was accepted. For those with recent experience, is that still the approximate rule of thumb for making HUD offers? I will only offer what I think is fair to pay (to consider condition, repairs needed, etc.), but I know that HUD tends to consider offers within a certain range.

Thanks,
Steph

Hi Jason,

Thanks for the info. I also found some articles about taxing your LLC as an S-Corp. It seems like a viable stragegy.

Hi Bill,

So are you saying that if you have one LLC and use it for holding your rentals, you can use that same LLC for your wholesaling? I've heard differing opinions on this, but most recommend keeping your wholesaling and rental companies separate (even if you properly insure your rentals). What are your thoughts?

Thanks,
Steph