My First Offer Accepted

Let me say a huge CONGRATULATIONS on getting your very first offer accepted. Now as for the little matter of funding (smile) lets not panic. Start by asking family members to maybe cosign or loan you some money. If all else fails start looking at the had money lenders. Sounds like a good deal so market it!

Let me know how you come out. and again congrats!

Anita, Thank you so very much for your response and advice. so far no luck with family. I may be talking to HML today. Also my funds letter from Coastal Funding was rejected, so I need to get a new proof of funds letter ASAP. This is a good deal, I must find a way.
I was thinking of buy and hold but what I need is buy and flip.
Mike

I am confused on how they rejected the funds letter after accepting your offer? Did you get a copy of the contract back from them, signed? If so, the proof of funds should be little more than piece of mind I would imagine. Then again, this forum is great in the sense I learn a lot about things I have never experienced or even heard of happening.

Do you have the contract with language to assign - or just to purchase? If just purchase then yes, look for hard money lenders. They don't care about the person behind the house - just the house. When they take a deal they take it because it is generally such a sweet deal it is advantageous if you do stop making payments - so they don't care about your finances one bit. Cover all your bases, these people are busy and don't have time to shoot the breeze with any random Joe that things they have a good deal. Pretend it is a job interview, a person without a resume won't even get a call, let alone someone with a bad resume. Get all of the info documented on paper with the math, house details, pics, whatever you can do to paint the picture that told you it was a great deal - and get that to HML's.

-J

Hello Anita: My first offer was accepted 6/25/09 here's the senario:

The comps are: $950,000.00 - $1,350,000.00
80% LTV
Accepted Offer: $1,190,000.00
Repairs: $ 8,000.00
Downpayment: $ 119,000.00

I have a pre-approval, the Seller wants 10% down to sign the offer contract. Can I get a hard money loan for the $119,000.00? Am I crazy to think this is a deal? I've been told Hard Money lenders do not want to take second position? Are there any personal Hard Money lenders?

What about Refinancing with a No Seasoning Refinance HML? HELP!!

I'm confused too. I'm assuming when you say "funds letter" you mean a "proof of funds letter" right? If you had that with Coastal Funding, why did you need to go to another lender. Was Coastal just providing a funds letter for the down payment money? I'm really confused.

is the same thing as a proof of funds letter. Coastal-Funding only does transactional funding meaning you have to have your buyer closing the same day as you're closing with the seller. You pay them (Coastal-Funding) back out of the proceeds you receive from the buyer. They do provide you with a POF for the amount you specific for the property that you are purchasing.

So what funds is Coastal-Funding showing proof of? The earlier post said he had the POF from Coastal and then he went to his bank and they said No. My thought is, if he got proof that he had the funds, why would he need to go to a bank, where he got rejected?

I'm sorry I must be missing something. Please help.

Coastal Funding does not carry mortgages or actually LEND money. The flash funding they provide never even transfers to you. The service they provide is to fund the first transaction in a double-close ONLY. They are gracious enough to offer a Proof-of-Funds letter to investors intending to use their services (apparently they are ok giving them out to those NOT using their services, too). This is what Mike would have used to go along with his offer (Mike, correct me if I'm wrong. ). Now he is needing to find financing OR an end buyer to carry out the purchase (this is where a buyers list comes in handy).
I hope that makes sense. Review the threads on Coastal Funding to learn more about them.

Mike, keep us posted on how it's going. Wishing you the best on this deal and all your future ones!!

Rina

Oh well, keep on trying. Actual experience failure or not is always a learning experience. dom

It's crazy, I keep hearing about people buying property for under 100k in states on the east coast or in the mid west. Out here in California, I'm luck to find a place worth buying for under 200k.

What I think he is saying is the offer was accepetd with the proof of funds from costal and that is all good, but he really does not have access to money so he needs a loan. I don't think he is doing a double closing so that is why costal can't help further.

Jeremy

Are you planing to hold and flip or assign the contract (for the property) over to another investor?

Hello everybody,
The one thing i do not get is...When doing a double close from AtoB to BtoC,
You need the flash funding for AtoB! It is the BtoC part i do not get.What i mean is...When i did the AtoB(B=me/or invester)the property is mine,Question is why do i need hard money for BtoC (C=end buyer).
You guys are the best and I do not know if i ever told you!!!!!!!

are you referring to using coastal funding or using a regular lender i.g. Wachovia to finance you deal? If you can obtain financing on your own through a regular Lender to close the deal than you won't be using coastal funding's services. They're just a transactional funder. Go to their website www.coastal-funding.com they offer the best explanation for their services & how they're used.

Hello Family,
Sorry about not posting and keeping everyone up to date. Jeremey was right, I made an offer to hud, offer accepted. their requirements were:
1. 1000 down
2. a proof of funds letter (funds letter)
3. Copy of my bank statement showing that I had at least 20% to put down on a 80,000 loan (typical conv. loan). That was tricky.

Here's how it went down. I made the 1,000 down payment, got a proof of funds letter from Coastal Funding, showed a statement that would cover the requirement for a typical loan 20% down 80% loan. I had no loan set up but I didn't think that was a problem because of my standing with bank. WRONG.

The Coastal Funding letter was rejected because they didn't like private funders( what difference does it make). Things were going sour fast. I started calling everyone looking for help. I even called a guy who no longer worked at my bank. We always had a good relationship. He started at another bank. we meet for lunch and guess what, he finaced the deal for me, I closed 6/25/09,

About the funds letter the realtor I was working with was getting a lot of heat from HUD. He told me that I needed a new proof of funds letter or the deal was lost. He called one of his lenders who owed him a favor and got me a proof of funds letter which was identical to coastal's letter. I still didn't get funding from either one so what was the big deal?

The house was a rehab and is now complete. It was appraised for $ 153,000. I am real happy about that. Now I need to sell or flip ASAP or lease/option, refiance 75% ltv if possible but I'm not sure how the lease option works. If you do lease who protects your property? What happens if the property is damaged? etc.

So family thanks for all of your help. Any advice on lease/option or sell/flip will be greatly appreciated.

Big shout out to Anita, Rina, Laura J, Jeremy and the rest of the DG family!

Mike

Anita,
Please check out my latest posting Sell/Flip or Lease/ Option when you get a chance. I Need advice ASAP!

Mike

Wow - congrats on sticking with it and completing this deal! You have alot of options open to you. First, can you rent for enough money to cover your costs and cash flow a little? If so - I would definitely recommend that. When the market turns you will be a greater profit, plus it you will have the equity in the home. As far as selling outright, again it depends on your numbers and the current comps for similar homes in the area. With the lease to purchase, there are many threads here that go into that in depth, but it is a great way to potentially sell your home. Do you have Deans first book? It explains it really well. The basic difference between that and renting is that instead of a damage deposit - they put a non refundable option payment (2-5,000). This protects them that you cant sell it to anyone else during their lease time, and shows you they are serious. Then a portion of each months rent will count towards their down payment if they exercise the option at the end of the lease for a predetermined sales price. Most times the tenants are responsible for repairs up to an agreed upon amount, along with utilites. You use two seperate documents. Anyway - I'm rambling and like I said there is a ton of info about this available! Best of luck with whichever route works best for you, and with the property next door. Do you know if its subdividable? That would really open up great possibilites on a 40,000 purchase!

You should come out to New Jersey and partner up with me! There are tons of houses under $100K and plenty are worthwhile!

Vincent