HML for Wholesaled Deal

[Lesley J.]

I have not had any problems with HML's until I ran accross this.

The property has a formally appraised ARV of 170K, loan needed 55% of ARV (this includes all repairs). the HML's in the area will not fund because the property is being purchased from a wholesaler who will not be taking title.

HML's have demanded to see copies of the wholesalers contract.

Reasons given: our business model does not allow us to fund this type of deal.

This reason is given by multiple HML's not just one.

I'd appreciate any comments, solutions workarounds etc:..


Lesley

[Steve Babiak]

You can offer to pay the wholesaler his fee outside of the closing, so that he knows he is getting paid. Then, the closing will be on the original price that the wholesaler contracted with the seller, correct? And the HUD1 would then reflect the actual seller's net and selling price that was agreed to. You have to somehow pay the wholesaler with your own funds to do this; check with your CPA to see how this would affect your basis for this purchase.