All Forum Posts by: John Taylor

I am currently in negotiations with this company, yet my query is to determine the viability of moving forward with the transaction as well as, to see if anyone out there has any additional information/experience that would be helpful in making a more informed this decision?

I ran across this site and they say..""

The Freedom Fund (the, “Fund”), is a private fund of money allocated to co-invest with individuals in real estate. The Fund allows both first-time homebuyers and seasoned investors to convert the equity in the property they purchase into immediate cash with n monthly payments ever. In exchange for the cash today, the homeowner or investor agrees to share up to 50 percent of the future equity growth of the specific property with the fund

has anyone hear of these guys...what's the catch?

There isn't any way legally to walk away from a purchase transaction with more that 2k (IL) it varies state to state. Don’t even think about increasing the price and giving a kickback of the difference to the buyer, it will get you in a lot of trouble.

The only thing that I can thing of is if the house is really STILL worth 127k and you sell it to this guy for 111k, what you can do is a Seller concession of up to 6% to cover closing cost or other incidentals/improvements so in this case you can increase the price to say 116k and give the buy a little cash 2k or less and with a FHA they will still go up to 97% LTV the remainder should cover his closing cost so essentially he will get into the property for no money down, have a few bucks, a new house and you get rid of a problem. Then I would tell them that at some point in the near future they can get their own 2nd mortgage or HELOC to pay off their debt in a few months. Because 97% Ltv of 116k =112,250 with a new appraised value of 127000 =.89 LTV so they should be able to get some or all of the difference between the purchase price and the new appraised value to do with as the please (but it won't be easy, yet that's not really your problem…anymore)

most hard money lender are looking to be in the first position (lien) verses in a second position like with the 20 portion of the 80/20, they also do not like high LTV loan (100% in your case).

Next you will have the problem of re-fi so soon after the purchase which will be easy for any bank to find the transaction and be able to tell exactly what you paid for the property. Hence most banks will only take the lesser of the purchase price of the current market value to determine the new LTV of the re-fi loan with in the first six months. For 6-12 months most banks will have a great deal of trouble with appraisals that are in excess of 10% above the purchase price, with out a great deal of documentation as to the repairs and all other work done to the property, receipts, building plans, permits, etc.

Given all of the various obstacles I think that it is very unlikely that your plan will work, or at least not smoothly.

I’ve been working with a private equity fund to buy investment properties that provides one of the most unique buying opportunities out there called the freedom fund.