Newbie trying to close on a townhouse w/conventional financing

[Helen Kirk]

Hi everyone,

Working on my first property:  

I've put in an offer on a 4br 2 ba townhouse for $80K in an area where the townhomes like this one are going for $120K and up.  It was accepted and I'm now to the point where I'm jumping through hoops with the bank.  They had given me a pre-approval letter earlier. I had a home inspection done, knowing it needed some work, including a new roof.  Now the bank wants a complete list of everything that needs to be done with an estimate of how much it is going to cost.  They want to have the funds needed for these repairs put into escrow at closing.  Is this normal?  Most of the repairs are cosmetic, with a new stove needed as well.  My own unofficial estimate is around $15K total (5K extra added just in case)

I have the extra funds for this, but was planning on using some of my credit cards for a lot of the work, and am a bit annoyed that I'm going to have to use my cash for the repairs!

I'm putting down 20% of the 80K, and my monthly payments on the remainder of 64K at 4% interest for 30 years will be around $380.00. I can get around $1200 - $1400 a month in rent, so cash flow will not be a problem.  My realtor is a bit annoyed with them as well.

After this experience, I think I'm only going to look for properties with seller financing!!! Not that I'm planning on flipping this property, but how do people flip houses if they have to put the money in escrow first???  I guess using conventional financing is not going to be something I use a lot of.