private funding

[George Zink]

looking for solution...winning bidder at cash only auction closing 5/2...purch 379,500...needs 100k rehab...ARV is 650k...I'm putting 190k personal $...borrowing 290k...private lender has agreed to fund but wants to establish mortgage at closing for the 290k...bank seller won't allow because it's a cash only deal...any ideas?...one option I thought of was having lender put the mortgage on my personal residence (value 450k...no existing mortgage) so they could distribute funds prior to 5/2 closing yet still have collateral protection...just looking for best strategy

[Jeff Rabinowitz]

They most certainly could have to comply with Dodd-Frankenstein but if the lender is not in the business of lending, if this is a one off situation, there may not be much reason to be concerned. The lender could move the mortgage to the investment property after that was purchased if everyone agreed. It is always advisable to check with a local attorney familiar with lending laws to be sure. Besides D-F, each state has their own version of the Safe Act and other lending laws which may need to be taken into consideration.