All Forum Posts by: Tom S.

@M. Greger   In addition to the great advice above, most lenders will require proof of funds to start the project, as you'll have to "front" the rehab funds to get started, then the property will be inspected and the rehab funds released from the lender according to a draw schedule.  

Typically they'll look for additional reserve funds in your name to make sure you can still complete the project in case it goes over budget.

@Dawit Wo  Bear with me for asking, why would you agree to 5k down and 0% interest?  Why not just sell it outright and invest in something with more interest?  Even a risk free CD is offering 4-5%.

Regarding the steps, generally that's correct.  I've purchased a number of SF deals in VT and it's handled by an attorney.  I would still use a good real estate attorney in OK who's done SF deals before.

@Daljit S.  Sorry to hear.  Although I'm not based in NJ, I would still recommend getting the initial paperwork going.  Typically a Notice to Pay or Quit (the wording may vary by state).  

That at least serves notice and gets the clock moving.  Many times they will respond.  If they don't, hire an attorney.  It's money well spent.  

Good luck!

@John Currey  The $55k loan amount could definitely be an issue.  What was the specific reason for the loan denial? 

@Account Closed I would step back and check that the total numbers work.  $230k to put into the deal, plus the assumable loan - is it worth it for a cabin?

 @Kelly Boulton I would assume she could put it in a trust at or after closing, but of course she would have to check with the lender.

@Ann Covey Not sure about the "closing in your company's name" part. Almost all assumable loans are FHA or VA loans, which I believe have to be closed in your own name.

Definitely check on that with the seller's bank and their process for assuming the loan.

@Devan Dorzok  Did you end up moving forward with this deal?  

@Devan Dorzok  Lots of potential items:

- How many units?  If it's 5 or more than it will be a commercial loan, so account for that in your calculator. Many commercial loans are 15 or 20 years.  

- Insurance is always higher with MF.  Taxes will most likely go up with the change of ownership.

- My experience with multi family is there are a lot of "extra" expenses. Someone damaging sheetrock in the hallway, damage to the outside, etc that can't be pinpointed to a specific tenant.  Also common areas that need maintenance, lighting, that will be on your bill.

- Inspectors: definitely make sure everything is to code. There usually will be new requirements with the change of ownership. Hard wired smoke detectors, egress windows or stairs to name a few.

@Brian Armstrong  Welcome to BP Brian!

It would be helpful to post some more details: your business plan, types of properties, price point and what you're looking for specifically from the investor.