Real Estate Information |
|
Conventional Financing For Wholesale Deals
This info is very important for both new and experienced wholesalers, AND buyers of fixer-uppers, to carefully read and understand. We learned it painfully, hopefully you won't have to :-) Often times we are asked by investors about using conventional financing for their investor deals. In other words, they want to go through a bank or other similar lending institution to purchase a fixer-upper from us, or another wholesaler. The obvious advantage is that rates are cheaper, and the loan origination fees (many times referred to as "points") are both much less than "hard money" (loans from individuals or small institutions specifically for investor type properties, with rates ranging from 5 points and 15% interest to 10 points and 18% interest). There are, however, some obstacles to using conventional financing of which you must be aware. First of all, these banking institutions will only loan on inhabitable, decent condition property. So if the property you are considering needs major repairs, forget this type of financing for the most part. Next is how you have structured the deal. Because of all of the recent frauds cases where banks have been burned, we have been unable to locate any conventional lenders willing to loan on a deal that has been "assigned" from the Buyer listed on the Purchase and Sales Agreement to a third party. They require that the Borrower be the Buyer named in the Agreement. And they absolutely will not fund the Assignment Fee. You can get around this if you can live with either of these solutions: 1. The wholesaler re-writes the Agreement with the Seller listing the new Borrower as the Buyer. This solves the paperwork issue. The Buyer will still have to fund the Assignment fee with some other source of funds. The wholesaler in this scenario is not protected because none of the paperwork demonstrates his right to purchase the property, nor the assignment fee to be paid. A separate agreement would have to be established with all of the parties. You see how this can get very complicated and cumbersome. By the way, even if you have a cooperative Seller you can not just list the inflated price (original sales price plus Assignment Fee) on the Agreement with a stipulation that the Assignment Fee portion will be paid to the "Wholesaler" at closing, because then the wholesaler's fee will show up on the Seller's side of the Settlement Statement appearing as if he acted as a Real Estate Agent. Note: This may be OK if the "Wholesaler" is in fact an agent. They'd need to check with their Broker. 2. The wholesaler must become the owner of the property and in the chain of title. Then he can legitimately write an Agreement with the Buyer listing the full price of the property including the assignment fee. The wholesaler can accomplish this with a cooperative Seller using short term Seller financing, "subject to" financing, or a short term bridge loan from a home equity line or private lender (usually friend or family). As long as the loan-to-value (LTV) still fits their requirements, the banks will loan on the new purchase price - thus funding the assignment fee. The other item to keep in mind when considering conventional financing is that it is relatively slow. Many mortgage brokers will tell you that their loans will be ready to close within 10 days to 2 weeks from submission. The reality is that they can only guarantee that they will process the loan and get it to a lender within a short period of time. With the current rush for refinances, most lenders' underwriting departments are backlogged - and applications can get stuck there for a week or more. They will also issue conditions that must be met, then submitted back to underwriting for final approval. Then add another couple of days for the loan package to be prepared and sent to the attorney. To be safe, you should count on three weeks to a month for a loan to close. If it closes sooner, you'll be pleasantly surprised. If the deal doesn't allow for that much time, you may want to consider alternative funding sources so you don't lose it all because time has run out and the loan isn't ready. Conventional financing does have a place in wholesale deals. We've closed several ourselves - but it doesn't work in all cases. You need to understand the process, and what will fly, and what will just kill the deal. Best of success & abundance, Lou Castillo FREE! Real Estate Investing Secrets To Earning $100,000 Your 1st Year! -- 11 Overlooked Real Estate Statregies That Will Turn Your Investing Business upside Down And On The Fast Track TO Success...Guranteed! Plus A Bonus Track With A Secret So Successful It Can Double Your Investing Income Overnight! http://www.InvestorSuccessTactics.com
MORE RESOURCES: Banks Believe They Are Well-Prepared for Commercial Real Estate Fallout The Wall Street Journal 'The Hills' Star Whitney Port Renting Out Her Stylish Studio City Pad for $9K a Month Realtor.com News Real-estate agent explains new fees to homebuyers, he's not worried Business Insider Dr. Phil left speechless after real estate agent claims that squatting is justified by colonization New York Post Inside Chris Pratt and Katherine Schwarzenegger's Real Estate Portfolio Architectural Digest Real estate expert says several factors impact farmland prices brownfieldagnews.com LOCAL REAL ESTATE TODAY 4.19.24 – KQEN News Radio kqennewsradio.com How environmental insurance diligence can shape commercial real estate transactions Insurance Business Top 25 Columbus Residential Real Estate Deals for January 2024 Columbus Monthly Celina’s first Walmart to be part of bigger vision for fast-growing city The Dallas Morning News Real-Estate Agents, Investment Advisers Chafe at New Anti-Money-Laundering Rules The Wall Street Journal Favourable Signals For Bridgemarq Real Estate Services: Numerous Insiders Acquired Stock Yahoo Finance How Real Estate Helped Taylor Swift Become A Billionaire Yahoo Finance Darien and Rowayton Real Estate Report: April 11 to 18 darienite.com Big Tech Is Downsizing Workspace in Another Blow to Office Real Estate The Wall Street Journal SAGE Investment Real Estate Advisors sells 24-unit Bergen County garden-apartment complex ROI-NJ.com Downtime: Pairing wine and real estate RichmondBizSense EG Real Estate: Busy Spring Market – East Greenwich News East Greenwich News Robin Hunden of Hunden Partners honored with Jeffrey D. Fisher Real Estate Legacy Award from Indiana University's ... Daily Herald Oregon Senate strengthens consumer protections in real estate transactions Curry Coastal Pilot SVN|J. Beard Real Estate adds chief investment officer to Houston office – REJournals REjournals.com An investigation into the University's controversial real estate holdings Johns Hopkins News-Letter See the latest Coles County real estate transactions Journal Gazette / Times-Courier S.F. housing market: Still very few homes, selling even faster San Francisco Chronicle Tortured Poets or Real Estate Rock Stars? Taylor Swift's Past Boyfriends—and Their Incredible Homes Realtor.com News Real Estate Broker Commission Settlement ClassAction.org Two Weichert real estate agents in Willmar recognized for work in 2023 West Central Tribune Prologis Warns of Slowing Industrial Real-Estate Market The Wall Street Journal Real estate brokerage firm Marcus & Millichap arranges $12.8 million sale of Fayetteville, NC mobile home park ... Greater Fayetteville Business Journal Importance of home inspections in Indianapolis real estate WISH TV Indianapolis, IN Navigating the changing role of real estate agents WISH TV Indianapolis, IN Housing Market Predictions for 2024 & 2025 Remain Subdued Norada Real Estate Investments Meet Samantha: Your A.I. Real Estate Agent of the Future The World Property Journal How Alexico's $180 Million Deal With St. Francis College Fell Apart The New York Times Solano Real Estate Scene: Homelessness, drug addiction and Theft Reduction Act Fairfield Daily Republic Q&A: What should a homebuyer look for in a Realtor? St. Albans Messenger PICTURES: See Inside Johnny Cash's Spectacular Real Estate Holdings Taste of Country Richland County OH real estate transactions recorded April 5-12, 2024 Mansfield News Journal Robert Bailey on Real Estate TPG Online Daily CRE Broker Magazine: a New Beacon for Commercial Real Estate Professionals Announced by Massimo Group Markets Insider 21 Largest Real Estate Companies in the World Yahoo Finance Real estate transfers GoDanRiver.com Quintana Roo announces important investments in Tourism and Real Estate The Yucatan Times Welcome to Real Estate Friday! theberkshireedge.com Owatonna named finalist in state real estate awards Southernminn.com Long-term exclusive property listing contracts now illegal in Arizona The Arizona Republic Toles, Temple & Wright Welcomes David Tucker as Newest Real Estate Agent Northwest Georgia News Chicago-area home sales plunged last month Crain's Chicago Business China’s real estate investments decreased by 9.5% y/y in Q1 GMK Center | English Navigating real estate market corrections RealtyBizNews Real estate transactions: Week of April, 2024 | Construction / Real Estate | insidetucsonbusiness.com Inside Tucson Business China home prices slumped in March as property crisis drags on Business Insider Parrot Realty Breaks Down the $418 Million NAR Settlement: Dispelling Myths and Forecasting the Future of Real ... Parkland Talk RI real estate transactions: What homes sold, for how much and to whom The Providence Journal |
RELATED ARTICLES
Researching Property for Real Estate Investing Much is being said lately about investments. There are many investments that one could make: stocks, notes, gold, retirement plans, etc. The Sadness of Old Buildings From the book No Smooshing!For years, I've carried on a not-so-friendly debate with some of my artist friends from the West Coast about their ideas of what constitutes a good subject. We seem to be able to agree on certain things, like apples and oranges-and even certain landscapes. Five Ps of Selling Houses 1. Planning:Know Your Target BuyersThink about your neighborhood and the buyers purchasing homes near your property. The Real Estate Bubble Fallacy There has been a lot of talk lately about the "Real Estate Bubble", and a lot of folks are asking the question: "When it is going to burst"?They are saying that the market just can't sustain this level of growth and appreciation much longer, and I heat them say that it is inevitable that it must come crashing down soon. People are worried. Planning for Real Estate with Estate Planning One of the most important considerations you will need to make in regards to your real estate holdings and your estate includes tax planning. If not handled properly, your estate could end up getting hit with significant losses due to taxes after your demise. Florida Real Estate Exploding For 15+ More Years? YEEHAW!!!!!! The south will rise again!! Can't you just imagine the Dukes of Hazard boys sitting on the hood of their car (the General Lee) grinning in front of a For Sale sign in their yard? Well, they should be smiling with the prices in the south, and especially in Florida. But will this Florida real estate trend continue? That is the $100,000 question. Why Move to the Poconos? Awaken to the sounds of softly rustling trees and tranquil gurgling streams. Stroll along quiet lush wooded mountain trails. Boom or Bust For those looking to invest in the real estate market?keep your eyes on the headlines. According to the Federal Deposit Insurance Corp. A Log Home Story Solving problems while maximizing valuesThis story has a few good lessons and observations that no doubt can be used by you to take advantage of hidden opportunities that often lie in plain view for all to see, however, most people have not been trained or instructed on how to recognize or find them.The following true story begins with a classic log home package, engineered, manufactured, approved and delivered for use in Alaska. 5 Hot Tips for Successful Real Estate Investment The last downturn of the global stock market saw millions of 'every day' investors having their fingers badly burned. Overnight life savings were eaten away, retirement funds went into decline and the economic forecast for all of us who had any money invested in stocks and shares was gloomy to say the very least. Many Ways To Make Money In Real Estate! Real Estate is a multi-faceted investment arena - there are MANY different methods to earn money from different niches in real estate. One or several may work for YOU!Here's the typical experience: "buy your own residence and sell it when its all paid off and you want to retire, oh my gosh look at all the money its worth". Seller Financing - Six Safety Tips Why offer seller financing when you sell? A higher price, a good return on your money, a faster sale and to sell a property that is otherwise difficult to sell. Some good reasons, but how do you do it safely?1. Encouraging Debt Most of us don't talk about money, finances, credit, debt.. What Makes Fractional Shares Different from Owning Other Kinds of Vacation Properties? Fractional shares ("fractionals") are sometimes confused with other vacation property options, such as time shares and condo hotels. While there are similarities, there are a number of things that make fractional shares unique, and thus suited for a certain type of vacation property buyer. Victorian. Modern. Colonial. What's Your Architectural Style? You are attracted to a home for more than its number of bedrooms and square footage. Whether consciously or subconsciously, you are drawn to the individual character of a home. Canal Front Homes in Venice A bit about VeniceVenice, Florida was named by an early explorer who thought the beautiful, clean canals that snake through the coastal community starkly resembled the canals of the historic city of Venice, Italy. In the 2000 census, Venice, Florida had a population of 17,764 people and that number has continued to increase over the last five years. How to Find the Sweet Spot in Real Estate Investing Psssssssssst, Want to know a great way to make FAST money in real estate? Listen closely now because this tip is definitely cashable.. Buying and Selling Real Estate: Negotiating to Win-Win You don't get what you deserve - you get what you negotiate for.If you've spent some time on homekeys. Appraisal or Home Inspection? People sometimes confuse a home inspection and an appraisal when they are in the process of buying a home.Most mortgage applications involve an appraisal, which can be a physical inspection of the property plus a written analysis of similar homes that have recently sold in the area. Stopping Home Foreclosure with Bankruptcy Bankruptcy Will Stop Your Sale - At Least For NowFor $395, you can stop your sale- at least that is what the ads say. You are about to find out how bankruptcy can be good or very damaging. |
home | site map |
© 2006 TIGER MEDIA |