All Forum Posts by: Corey Owen

Seller financing is not an option on this one.  I definitely tried!  I certainly may not be using the correct terminology, but the way it was explained to me the original seller is not at risk of anything but not being able to sell during the 60 days.  I can't do anything with the property unless they are paid off and if I can't in 60 days it reverts back to them as of I were never involved.  

I am looking to purchase an 8 unit apartment complex and recently was given what I believe is an excellent idea how to purchase for no money down.  The problem is that I don't fully understand how to do it.  The suggestion I was given is to ask the current owner deed the property to me and hold the note for 60 days.  Then I can apply for a refinance loan instead of a purchase and as long as the appraisal came in 20% higher than the purchase price I can pay the current owner asking price and be in the apartment for none of my own money.  He said to structure the note so that the apartment reverts back to the original owner if I can't get the loan.  The theory is that they are not at risk of losing anything but the 60 days I have to secure financing.  I risk nothing other than the cost of the appraisal because I put nothing down and the deed simply reverts back to the original owner of I can't secure funding.  This sounds like an awesome idea, but I don't understand how I take possession for the 60 days to apply for the refinance without putting the sellers at risk.  What kind of documentation do we need to do to do this properly?  Thanks in advance! 

@Jeff Lezark This sounds like exactly what I need. Have you ever had an issue with a bank questioning the funds being in your account and not in the buyers account. I put an offer in on Friday with a simple screen shot attachment of my lenders bank account balances and they questioned why the account didn't have my business name on it. I have another offer with a deadline of tomorrow for POF and I am concerned that they will reject it simply because the money is in his account and not my business account. Does the letter of intent take care of this issue? Lastly, if you are comfortable, would you be willing to send me a template of the letter you use when submitting offers?

Hello BP Community! Once again I am in need of some advice. We have private investor that wants to back us on our next rehab project. Is there a way to show the investor's proof of funds on our behalf when submitting an offer. We just had one rejected because the account we showed with the offer was not in the company name we submitted. I know many people on here use private money so how do you show POF before the money is deposited into the escrow account?

I second Kennesaw. It is very difficult to find a deal, but you will have zero issues finding good tenants.   Depending on home size you can expect $1200+ on rent with some homes able to bring in close to $2000.  You will really have to do your homework to find a deal though if you are trying to stick to the 1% rule. 

@Jay Hinrichs We're trying to limit the amount of involvement the investor has. He is really looking for almost a complete hands off approach to investing so he doesn't have to go to any closings. Ideally we would find the house, send him the rehab budget, ARV, comps, etc. The loan terms would already be agreed to and in writing so all we would have to do is giving him the closing attorney's wiring instruction and he wires the money to close, some type of escrow account handles the rehab disbursements, and then he receives a check when the house sells.

@Jim Tannehill Thanks for reaching out!  I can't wait to hear what has to say.

Hello Bigger Pockets! I am in need of advice from investors that use private money for their purchase/rehab of homes. I have an investor that interested in backing us on our next venture and we are collectively trying to figure out what type of documents need to be drawn up to protect both us and the investor. Here are the questions that have come up so far and please feel free to let me know anything that I may have forgotten as well.

1. Is there a way to have a contract written in advance that we can simply turn into the closing attorney that shows the terms or do we need to contact each closing attorney and given them all the specifics of the loan i.e loan term, origination fee, interest rate, etc? The advice we were given by one closing attorney was to contact each one we use and give them the info

2. We want to be able to make cash offers on properties to increase our likelihood of landing the deal. How would we show the money in their account as proof of funds without requiring them to be on the title. Do they have to put money in an escrow account that we also have access to for POF?

3. Once we have agreed on the property and terms and want to close how can we ensure on our end that once they fund the purchase into the closing attorney escrow account that they then can not back out of the deal. I have been told that there is no way when they send money into an escrow account to close on a property that we can "force" them to close. I am imagining a worst case scenario where we come to the closing table ready to purchase the property and the investor has cold feet and withdraws the money from escrow and we are stuck losing our deposit.

4. How do you deal with funds for the renovation? We have agreed that we will do weekly/ biweekly disbursements after they have received receipts and inspected the property, but is the money held in an escrow account or is it better to have the investor wire or write a check? Will a typical closing attorney hold money in escrow that they disburse? Are there fees associated with this?

5. How is interest on Reno loans typically calculated. An example would be that we agree to a 25k reno budget. The money is disbursed in 3 payments at 1 week increments. We end up only using 22k. Do we pay interest on the 25k or the 22k? Is it calculated from day of closing or from each disbursement period?

6. Is repayment on the back end typically calculated by the closing attorney or do we need to figure out at the end, most likely on the reno portion of the loan?

Any other questions I should be asking please let me know. If you have a case study you could walk me through that would be great. Thanks in advance!!

Hello Bigger Pockets! I am in need of advice from investors that use private money for their purchase/rehab of homes.  I have an investor that interested in backing us on our next venture and we are collectively trying to figure out what type of documents need to be drawn up to protect both us and the investor.  Here are the questions that have come up so far and please feel free to let me know anything that I may have forgotten as well.

1. Is there a way to have a contract written in advance that we can simply turn into the closing attorney that shows the terms or do we need to contact each closing attorney and given them all the specifics of the loan i.e loan term, origination fee, interest rate, etc?  The advice we were given by one closing attorney was to contact each one we use and give them the info

2. We want to be able to make cash offers on properties to increase our likelihood of landing the deal. How would we show the money in their account as proof of funds without requiring them to be on the title. Do they have to put money in an escrow account that we also have access to for POF?

3.  Once we have agreed on the property and terms and want to close how can we ensure on our end that once they fund the purchase into the closing attorney escrow account that they then can not back out of the deal.  I have been told that there is no way when they send money into an escrow account to close on a property that we can "force" them to close.  I am imagining a worst case scenario where we come to the closing table ready to purchase the property and the investor has cold feet and withdraws the money from escrow and we are stuck losing our deposit.

4.  How do you deal with funds for the renovation?  We have agreed that we will do weekly/ biweekly disbursements after they have received receipts and inspected the property, but is the money held in an escrow account or is it better to have the investor wire or write a check?  Will a typical closing attorney hold money in escrow that they disburse?  Are there fees associated with this? 

5.  How is interest on Reno loans typically calculated.  An example would be that we agree to a 25k reno budget.  The money is disbursed in 3 payments at 1 week increments.  We end up only using 22k.  Do we pay interest on the 25k or the 22k?  Is it calculated from day of closing or from each disbursement period?

6. Is repayment on the back end typically calculated by the closing attorney or do we need to figure out at the end, most likely on the reno portion of the loan?

Any other questions I should be asking please let me know.  If you have a case study you could walk me through that would be great.  Thanks in advance!!

@Dave Foster can you expound on why you couldn't use a 1031 exchange for a flip?