Occupant won't let appraisal, then I can't get hard money.

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Occupant won't let appraisal, then I can't get hard money.

Luis Blejer
Passaic, NJ · Member since 2017 · 10 posts · 2 votes

I bough a house in Teaneck NJ from the foreclosure Sheriff sale. The house is worth 322k and bought it for $211K . I was planning to use hard money and I paid $43,000.00 but I'm stuck in a vicious cycle.

The owner won't let me in for an appraisal so:

I can't evict until I close

I can't close until I have the money

I can't get the money until I can get an appraisal.

So, can anyone recommend a hard money lender that can lend without access to the house or what to do in this situation? I'll be happy to wholesale if I could.

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Adam Sanders
Philadelphia, PA · Member since 2016 · 73 posts · 28 votes
9y

Did you offer the owner some cash in order to let the appraiser in? 

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  • Adam Sanders
    Philadelphia, PA · Member since 2016 · 73 posts · 28 votes
    9y

    Did you offer the owner some cash in order to let the appraiser in? 

    2Reply
  • Andrew Johnson
    Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
    9y
    Luis Blejer Use some cash to persuade the owner. Maybe offer the hard money lender something (like your primary residence) as collateral. There are solutions, just not fun or easy ones. Maybe an HML will jump in and be up for the added risk. But they'll want some added upside for that.
    0Reply
  • Luis Blejer
    OP
    Passaic, NJ · Member since 2017 · 10 posts · 2 votes
    9y

    I tried offering money, she claims that the figth is not over and she thinks that she is getting the house back. This is a perfect investment for someone who has cash to close and evict

    0Reply
  • Kerry Boyle
    Lender · Bethesda MD · Member since 2017 · 283 posts · 123 votes
    9y

    This is a difficult one!

    I previously worked selling REO/Short sales for another company and we once thought the value was 500k in disrepair, after looking inside we found it to be worth about 250k. Jersey has a particularly heinous foreclosure timeline, so she probably hasn't been paying for at least 5 years - which means a lot of deferred maintenance and damage. My point in saying that, is a lender may not be comfortable stretched to 80% of acquisition without any interior knowledge and this market in particular.

    Your best bet is a local lender who won't require an appraisal. At least reach out to your HML and ask if there is any work-around.

    Further, find out if the owner knows a realtor that they trust. Maybe you can get a BPO out of it, or at least interior photos. I have no idea why this works, but I have used it successfully before. 

    You can also try offering her security deposit and first month rent or something for a new place. It may be better than eviction. If she has an eviction on her record - she will find it basically impossible to rent. Logic may be impossible to use with someone who believes they don't have to pay for their house, so maybe try an emotion based argument.

    Best of luck!

    1Reply
  • Luis Blejer
    OP
    Passaic, NJ · Member since 2017 · 10 posts · 2 votes
    9y

    Thanks everyone, This is my first deal, I guess I picked the wrong person. I tried offering money but the lady is in la la land thinking that she can still save the house. How likely is get out of the deal by filing a motion to vacate the sale? 

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    so am I understanding this correct

    1. sherrifs sale you are winning bid

    2. you put up 43k non refundable to sherrif

    3. you have a certain amount of time to bring in the rest of the funds.

    4. you bought this without having enough cash to close

    5. your relying on a lender to put up the balance of the purchase price

    now out our way HML will give money at the sale and then do the loan after the fact.. you need about the amount of equity you have put into it.. they charge a bidding fee on top of HML fee.

    I think you should be looking for an equity partner who can stroke a check then refi when you get control...

    that's a weird way to buy sherrifs sales.. most trustee or sherrif sales I have seen its cash on the spot day of auction or next day latest.

    Its what I love about RE in the US no two states are the same.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    PS how the HML does it in our area is at the auction they put their name as buyer.

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  • Oleg Shalumov
    Rental Property Investor · Teaneck, NJ · Member since 2016 · 567 posts · 291 votes
    9y
    Luis Blejer , PM me as I may be able to help.
    0Reply
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