HUD ISSUES

Thanks for sharing your experience.
I'm wondering, where is it they want the $ wired to? The closing company? I'm surprised the bank won't send it as long as it's a title company holding it.
I hope it works out.

Maybe you can post some numbers in here to let DG investors see the deal. Someone may jump on it. Is it in one of your DG classifieds?

Rina

They want the money to be wired to a HUD bank account (USB BANK) a day before closing. I spoke with several mentors in Deans academy and they were suprised to hear about HUDS rules. They did not have too many recommendations. One recommendation was to use a hard money lender, but these hard money lenders charge high interest and typically they want high FICO scores as well. I already called 7 of them and they all wanted FICO of 700.

Are you certain your buyer would carry through if you had the funds the day before? Say if someone could lend you the $28K for a day? If someone charged you $1,000, would you still make money on the deal? Have you considered YOUR closing costs? (just brainstorming "just in case").

Rina

Yes, I am certain. Even if I am charged $1000 I would still make $1000 plus which would be including my earnest money that I will lose if I cancel. I could provide my title company contact and everything needed for the deal.

will they give you another extension on the closing? See how long they will give you. I suppose you won't know 'til morning, but post that ASAP, ok?

Yes, my extension is actually until February 3rd. I would need to let the CASH buyer know.

Rina, do you have contacts that would fund this deal? That woud be excellent if you do. I also have a buyer that was approved for up to $80K, but he would not be a cash buyer. The same type of house across the street sold for $85K and the majority of the houses on the street sold in the $70K's.

That gives you 10 days. While I am NOT necessarily promoting this, I wanted to point out that anyone sitting on $28K, if they were to "lend" you the money for just a DAY in exchange for $1000, they would get a rate of return of 1300%! (THAT'S how Coastal Funding makes THEIR $) A little due diligence and an agreement with you could be an easy $1000. (That is all one needs to qualify as a deal in the coaching program). win/win

Remember, I am not promoting anything, just thinking a little different about working with a fellow DG member.

I have had the most positive experience working with another DG member. I'll be thinking about this too, Jason. But either way, I know you'll make this work.

Rina

Thanks Rina. Time is of the essence here. We were suppose to close tommorrow and HUD and the realtor will want to know what my plan will be. If you know someone that wants to make an easy $1000 please let me know ASAP.

I think you'll be getting some PMs.

Rina

That would be excellent. Thanks Rina..

Hi Jason, I just sent you a pm. I hope we can work something out. Email me soon. Thanks. -Jeremy

Maybe YOU should be on Dean's coaching payroll.

Al

I agree with Al

Thanks, guys. But I'm just learning along with everyone else.

I agree as well Rina..

have you thought about renegotiating the contract with your end buyer AND/OR blasting the property out to another interested buyer? I feel that this would be a good time to exploit a competition amongst investors you have on your buyers list. Maybe you can come up with a buyer who is willing to cover the 4000 in expenses for coastal fundings rates or find a buyer who is willing to pay a few thousand more to make 30% ROI (or however the numbers work out to be.) When you advertised this prop out to your buyers, how many were interested? at the same time, now that you konw the restrictions and regulations, have talked to the end buyer and possibly tried to renegotiate the contract since the situation is changed? His bank is obviously the one holding you guys back from the deal going through, so i feel this is an opportunity to possibly get him to cover the extra expenses in you getting funds from coastal funding or at least have him cover 75% of it so that you both can get the deal. If the property has serious potential, i feel he should be able to compromise in the deal in order to obtian the property, esp if it is his bank holding you guys back

thats what i would do at least!

ps - if you have any notes to sell, i can help you cash out of your investments so that you don't have to borrow from others and you can use it towards other investments! let me help you make more deals in a month!!

Good investing!

I don't understand why the HUD's bank want the money to be wired a day before closing. Personally, if i don't deal directly with the seller or buyer face to face, i don't see a point of wiring the $$ a day before closing. Another thing to consider, most investors who pay cash usually have cash approved letter by the bank, and the funds would not release until closing, so if the HUD refuses to do a deal with you based on their restrictions, then you shouldn't do business with them. I think that fishy the HUD wants you to wire the $$ in advance and before closing. What's wrong with writing a check a day of closing? I'm not being negative, but that's something to think about. If not, there's other alternative stated above. Most properties that i've purchase so far, i mentioned that i would pay cash, but that doesn't mean that i have 50k laying around. I usually use the bank's money as most investors do. Good luck and happy investing!

Lloyd

I do a lot of HUD deals. The reason you have to wire the funds will blow you away. (I just closed on another HUD deal 2 hours ago by the way). HUD makes everyone wire funds because they have had problems with certified cashiers checks bouncing from banks!!! I guess with all of these banking problems even the big banks are bouncing checks even though the money they are bouncing it against is the money you have deposited into your account!

A friend of mine closed on a 3 million dollar property last month and guess what happened at the closing table? The bank showed up and said they didn't have the money to close the deal!!!

It is crazy out there. Just keep pushing forward and work through the issues and you will be rewarded!

Jeremy wired the money for me to close on a HUD property today. Thank you Rina and thank you Jeremy.

Cbrpower, I could use alot of advice if I would have reached out to you about HUD homes. I would like to speak to you more about HUD homes because there are lots of great HUD deals out here.

Jason, so how did it go? I assume you just got back from closing? Let me know how it went. It is going to be a win/win for both of us! Also, Cbrpower, I would love to hear more about HUD homes as well. There are so many out there but I know they can sometimes be complicated. Can you post more about it?

May be the beginning of a long and prosperous business relationship.
Good job, you guys!!!!

And, yes, I think we all would like to hear more about the HUD homes.

Rina

The closing went great today with HUD and the second closing will be monday with the buyer. Thanks again Jeremy, and I am sure we can do lots of deals. There are many great HUD deals and most investors stay away from them because as CBRPOWER mentioned you need to wire the funds prior to closing and usually investors don't have the money to do so. In this case, I was going to cancel the deal and if I did not have the discussion with Rina last night, and if Jeremy did not respond, this deal would have been cancelled today. My buyer was suppose to wire the funds as he indicated in our contract but he needed his bank to release the funds on certain conditions, so this held things up. Fortunately, things worked out here and I am glad to have such great investors helping each other out here. I definately want to do lots of more HUD deals.

When dealing with HUD, they will not allow you to use "and or assigns on the contracts." To get by you will need to do a seperate closing which will be one with HUD's GBS partners as required by HUD and another closing with your title company for you and your buyer. So basically you have two contracts, one with HUD and one with your CASH buyer.

Jason, How does your stomach feel now that it is done? Man,, what a learning experience. I am so glad that it went well for you and Jeremy. Great going...Jan

Hey Jan, I saw your post on a house you are looking at upstate. Can you tell me more about it? What condition it is in, etc.? I am looking to invest upstate. -Jeremy

This whole deal was stressful and thanks to Rina and Jeremy my stomach feels alot better and I also feel wiser and more confident with doing more deals not only with HUD, but just in general. Obstacles can be painful, but when we get through them it's an awesome feeling.

Hey Jason....Did you use your own contracts of did you have to use HUD's contracts?
What about escape clauses? Did you put any in the contract incase you had to back out at the last minute?

Good questions you asked here. This was a learning experience and I did not use any escape clauses and was counseled by Deans Mentoring group about this. I should have definately used escape clauses and will use them for all my future deals.

When you're done on Monday you should give us a little first-hand insight on double-closings. While this is not a "simultaneous" close, I would consider this a "double" closing. Anyone else think so? yes? no? CBR?

Rina