All Forum Posts by: Adam K.

Thanks for the response John. So I don't see a problem or conflict using their title insurance provider since I will be taking title. Not sure I fully understand the concept of whoelsale but have seen and heard references to it previously. Guess I gotta read some more threads on BP!

Am in the process of purchasing a foreclosed property to rehab and flip and there was one clause that I didn't quite understand so thought I would post for some clarity.

Section: Closing Costs/Concessions
"Purchaser may choose the title insurance company for the closing. If Purchaser agrees to use the title insurance utilized by the Seller's attorney or agent, then Seller agrees to pay for Purchaser's Owner's Title Policy. SELLER WILL NOT BE OBLIGATED TO PAY ANY PORTION OF THE COST OF AN OWNER'S TITLE POLICY IF THE POLICY IS NOT OBTAINED FROM THE TITLE INSURANCE COMPANY UTILIZED BY SELLER'S ATTORNEY OR AGENT"

So I understand the concept of them paying for versus not paying for. I guess I'm wonderring why I would not just use their insurance company for the title to save some closing costs? Is there a real conflict of interest here and if so, why? The seller in this case is a bank who has foreclosed on the property.

Thanks,
Adam

Thanks for the responses guys. Mike V, lovin your 70 Boss. Is it real or a clone?

Glad to know the fees are considered normal and in line. I plan to review my options with taking a higher rate for less or no (best case) points. Since I'm flipping this, I only plan to have about 4 months of carrying costs and on such a small mortgage, the higher rate is insignificant.

I have been a lurker for the last several months here at BP while I have been researching and trying to put "the right" deal together. Now that I am in the game, I hope to become an active member and at some point contribute.

Best,
Adam

Thanks for the replies guys. I got my GFE from the mortgage company just now and was surprised at the estimated closing costs coming in at ~$6k. The points are 3.125 (breakdown is 1 pt = construction, 1.75 = non owner, .375 = loan <100k). The loan amount including rehab money is $94k, the (rate is 5.00%) so am now thinking maybe I should borrow an additional $6k to avoid the .375 pt. So points total $2,950. The other $3k is made up of:

Appraisal/Inspection Fees - expected
Credit report
Tax related service fee
Application fee
Processing fee
Underwriting fee
Hazard Insurance - expected
Attorney's fee - expected
title Insurance - expected
Title Updates (due to construction loan) - expected
Recording fee (mortgage)
City/County Tax/Stamps (deed) - expected
Survey - expected
Reinspection fees (3 due to construction loan) - expected
Doc Prep

Any guidance on which if any I should be negotiating? My credit is flawless (her words) and I have a very healthy balance sheet/net worth so my risk is low.

I'm happy to share the lender's info if people are interested, PM me.

Let me clarify. What I wanted to do was to obtain a mortgage to purchase the home and use an HLOC to fund the rehab costs. Seems like conventional mortgages are not flexible enough for this approach due to the fact the house is not habitable as it currently sits. I connected with a mortgage company this morning and they seem to have a construction mortgage that will work for me. Although it requres me to use their money for the rehab versus an HLOC, but I can work with that. Just curious what other investors are doing to finance homes that have significant damage and are not habitable.

I am about to go to P&S on a sngle family home that is foreclosed and the house is not habitable. This is an investment property that I plan to rehab and flip. What is the best avenue for financing on a project like this? I have heard that because the property is not habitable as it currently sits, it prevents me from pursuing conventional mortgage. Although I would prefer to finance the project including rehab costs, I will probably just use a home equity line off my primary residence to fund it. However, I still need a mortgage to purchase the property. What are others doing? I am located in MA if that matters. Also, sorry if I posted this in the wrong forum, too many to choose from ;-)

Thanks for the information guys. This property needs a fair bit of work, but has very good potential. Based on the DSCR formula, the ratio is 2.3, so would be viewed as a lower risk/good deal to a lender.
Does anyone have example spreadsheets/documents they use to package/position a deal in order to present to a lender? I would rather use something that is known to be acceptable and work rather than zero base everything.

Thanks,
Adam

Thanks for the info Mike. I guess my next step is to find a commercial lender that I can work with. Are there any spreadsheets circulating this forum used to help evaluate the health of the deal that I coud use as a tool to position the health of the property to a potential lender? I have read much about the 50% rule of thumb, but looking for something with a little more analysis to it.

Thanks,
Adam

Hi all,
First time posting, but have been reading and researching the many great resources on BP for a while now. I am interested in purchasing commercial 8 - 12 unit apartment buildings in MA and am not very familiar with the commercial lending that would come into play. As I understand it, typically requires 30% down or LTV = 70%. Assuming I had the 30% down, what other requirements are there to overcome? Do banks usually require a track record of REI or some other requirements? I'm trying to get educated pretty quickly before speaking with lenders about some properties I am interested in. Thanks in advance.