Buying method - could this work?

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Sam Tidwell So I read this whole forum then realized it was you who asked the question. Welcome to the forums. I know I have helped you a little in person but the people on this site know 1000 x what I do. For all of you who do not know him Sam Tidwell is a very smart, driven young investor. He is jumping into this with both feet, and I believe he will come through the other side successful. To answer your question: This purchasing strategy seems possible, but highly unlikely. A bank will only loan 70 maybe 80% of the value on a cash out refi. This means you would need 20% down or the seller would be willing selling to you for 70% of it's value. EVEN if you convinced the seller to do this I don't think you are going to get the bank to agree. You have to put yourself in the seller/lenders shoes. Why would they ever choose you over the big company's that can write a check and close that day and have years and years of experience. You have to have a real reason for this question or you will never get anyone to lend to you. I will admit I never figured it out. I started The hard way. I Saved my money and invested it back in. I have had several deals presented to me that I could Have owned with 0% down. The problem is they were far from a deal. DONT CHASE NO MONEY DOWN DEALS ONLY BASED ON NO MONEY DOWN. For your situation they MUST cash flow. How much is up to you. In my experience you pay for 0% down in so many other ways that it Never seemed worth it. My suggestion is to look into land contracts. If you can't make that work. Try convincing someone close to you to lend you money. Or how I ended up doing it, do anything you can to make money until you have enough to buy. I hope this helps. Good luck! If I can help any other way let me know.

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unfortunately, this is pie in the sky.

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Land Contracts in Ohio are popular, and there is a realty law that says if you have less then 20% equity in a land contract, and less than 5 years, and the vendee - buyer defaults in paying on the contract, you as the vendor - owner can evict in landlord tenant court.So you as a REI could buy on land contract without alot of credit or cash. And reassure the seller they have recourse if you do not pay them.Seehttp://www.ohiolegalservices.org/public/legal_prob...http://www.justanswer.com/real-estate-law/2fuqk-do...Also, you could lease option and assign.Buying on terms has always been an option to REIs.

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@Sam - It sounds like an interesting idea. There are things to consider, like closing costs on a refinance with cash-out. And you would need the owner to agree to get a specific type of loan as well (I'm not sure how many banks offer assumable mortgages). I believe that the only assumable mortgages left are FHA mortgages, which means higher fees on the mortgage closing because of FHAs new rules.@Curt - Are you sure that your information is correct? When I refinanced my house through Wells Fargo, using FHA to do a renovation loan that converted to a regular 30 year, it was assumable after that. Yes, the buyer would still have to qualify for the mortgage in terms of creditworthiness, but he wouldn't have to come up with a down payment if he was just assuming the mortgage.I think the main thing is going to be convincing the seller to refinance with cash-out on their home, unless they're motivated and willing to work with you. Again, there are closing costs to consider which could be a couple of thousand dollars which you have to determine who will be responsible for paying those.-Joshua

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They would have to be willing to sell to you at no more than 80% of actual appraised value. Why would they? And also incur loan costs. And also tie up their own credit. And then the bank has to let you assume the loan, which will definitely involve looking at you.So you are offering the risk, expense, and a below market price. I would not expect people to be lining up to sell under those conditions.

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You will not find a bank that will let you assume someone else's loan. I dont know if you qualify for bank financing or not but if you dont then the bank would surely not allow you to assume a mortgage. The lender makes sure first YOU qualify to purchase. If you dont have enough funds for 20% down payment + closing cost the bank wont look at you. If you can not qualify for financing you wont get a loan. Try looking for owner financing. This will only work if the seller owns the home free and clear. Good luck

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@Sam Tidwell welcome to the site.