Private mortgage lenders?

Question

To make a long story short my wife and I are selling our current home (in contract, closing soon) and due to the worst possible timing I was forced to change jobs which ruined our FHA approval on the home we were trying to purchase. We have $ for a good down payment. Are there any real estate investors out there who will buy the home we want and immediately sell it back to us on short term contract for deed with balloon? Or some other creative solution?

Ned Carey · Answer

@Andrew Koss Asking for loans outside of the marketplace is not allowed. Another moderator may take this down. But I do think it deserves an answer.NOThe same reason a hard money lender will not loan you money for the house is why an investor shouldn't. They will likely be breaking the law. There are strict guidelines that have to be followed for owner occupied properties. I work with some of the top attorneys in Baltimore - none would do owner occupant loan docs. I also believe Balloon payments are not legal for owner occupants. There are people here on BP much more knowledgeable than me on this issue but that is the gist of it.

Matt Crusinberry · Answer

@Andrew Koss, If the seller will not do any type of financing, even after you've offered him a deal as you're describing here, than I suggest using a form of hard money. You should be able to contact these individuals and figure out which one is offering the sweetest deal for your particular situation. You should be able to find them here on BP, or these two also do private lending: Conventus or DoHardMoney.com. I would also recommend you reach out to your local REI's group, and see if anyone there is interested in a deal, especially since they're more likely to be familiar with your area/market. And my final advice would be to search out other prospects in/around your area to see if another seller would be willing to work with you. Again, good luck!

Matt Crusinberry · Answer

@Andrew Koss, I would suggest speaking with the owners of the property you are trying to purchase. They would be able to work you out the best deal. You could also do a search for rent-to-own or land contract, and utilize whatever buying options they have available. Good luck!

Ned Carey · Answer

@Andrew Koss you would be doing nothing wrong. The lender potentially is. It is the Dodd Frank law. It is designed to protect borrowers from predatory lending. Of course those who wrote it ignored that it also takes options away from consumers. I presume you mean contract for deed. I believe that is also covered in Dodd Frank. Contract for deed is essentially owner financing. An owner occupant is not subject to these rules. An investor is.

Andrew Koss · Answer

my apologies. Feel free to remove to the post. I will post it in the marketplace.

Matt Crusinberry · Answer

@Andrew Koss, You may want to check with family and friends as well. I agree with @Ned Carey, to be more blunt, you are soliciting.

Andrew Koss · Answer

Ned perhaps you didn’t read my original question and I apologize for not posting this In the correct place. I will post It in the marketplace. I don’t see how what I am wanting to do could be illegal? We want to buy a home. We don’t currently qualify for traditionally financing. I am not requesting a private mortgage loan. That would entail us actually getting the money and then personally holding the title. What I am proposing is for a real estate investor to purchase the property as an investment opportunity with a new buyer already lined up ready to go. They would sell us the property on contract. How would that be any diffeeent than an investor purchasing a rental property and turning around and renting it or doing a rent to own agreement?

Matt Crusinberry · Answer

That's why I recommend looking into the private loan aspect of things. The two I gave you will do private loans. Explain what you're trying to accomplish, and just ask what they have available to help. Also, ask what other alternatives are available.

Andrew Koss · Answer

@Matt Crusinberry I was under the impression that HML is not available for owner occupants.

Andrew Koss · Answer

@Matt Crusinberry thanks for your reply. Unfortunately we have tried that route. The seller is not interested in selling the property in that fashion and our market is very slim as far as quality homes you can purchase in this manner. The proposal I have in mind will gross an investor at minimum $40k in 24 months. What’s more, we would even be willing to put 6 months payments in escrow up front in addition to our down payment. That way they still earn the interest on the payments. I’m not an investor and realize I am a novice here but to me, that kind of R.O.I. Secured by a good property would be a no brainer to a creative investor. No?