All Forum Posts by: Eric Telese

@Chris Mason Yes I agree, they are scared the property is not really worth that in the eyes of the bank. I must also mention- they had the property appraised 2 months ago at $430k (from an appraiser I am sure the attorney does repeat business with). 

I then had it appraised at $420k (my appraiser said that the 430k was fair though). So at 410k, I am already purchasing it at a discount. Is there a big chance the bank appraisal is way off from these private appraisals? Closing will also be 3-4 months from now, so I'm not sure when they will send the appraiser and if market can change much.

Now that we figured out their motive, should I still ask to include "if the bank wants more than 5% down, due to the condition of the property, but not the value, buyer will provide." ?

Also, what difference does it make if someone is putting 20% down, doesn't the bank still need to appraise it at the agreed upon purchase price regardless of how much down payment in order to lend them that 80%?? 

@Chris Mason a little update...

Today my attorney and the seller's attorney spoke. What he wants to see is a separate contract stating that "buyer will supply extra funds if the bank won't lend the full amount required". So if the bank says that the property isn't worth the agreed 410k, I need to come up with more out of pocket.

Should I do this? I feel like I am being pinned up against a wall by them. Why would I pay 410k if my bank deems it is only worth say 390k?! Most of me knows that the appraisal will not be an issue though and it will likely come in at $410k or higher...

@Ned Carey agreed I could understand this. Properties need to meet living standards. Though this should be fine as it has kitchen, baths, walls, roof, plumbing, doors, electrical, etc. all in working order. House is pretty old and nasty and to be to my personal standards, it needs a lot of work. But it should be fine for basic livability standards.

@Chris Mason BINGO!!! That’s exactly what I was hoping to hear.

I’ve learned a lot over the past few years so I was pretty confident when I told him I believe 5% and 30% should make no difference.

Of course he threw around that “I’ve been working in real estate for 42 years” weight and of course said that he has seen this happen. I did begin to think maybe this is a possibility. Going to triple check and call multiple lenders on Monday and hammer them on this question.

Anyway, now I am really starting to wonder- is he trying to throw some BS verbiage in there to make it so that I HAVE to come up with the difference should my bank’s appraisal come up shy of our agreed purchase price?!

Maybe he is also just worried that a bank may consider this house unlivable standards and won’t lend at all. At this point we would be tied up in a contract for 3-4 months and they’d have to start fresh looking for new buyer. But this would occur with any conventional buyer unless purchasing cash..

Hello all.. I have a property that I am bout to go under contract on, to be a primary residence. This will be a private deal with our attorneys- no real estate broker involved. The contract will be signed soon but the deal will not be able to close for 3-4 months. Both owners died, one of which didn’t have a will, so they have to get their nephew appointed as executor before we can close.

Today, I spoke to the seller’s attorney to get the purchase price and some other info straight. He asked how I will be financing the deal, told him conventional. He asked how much of down payment. I told him 5% down conventional loan. He said that this makes him uncomfortable because the bank may ask for more money as a down payment because of the condition of the house and it being sold AS-IS. The house is in livable condition with some holes in sheetrock but nothing too major. I have never heard of the lender coming back and asking for more money as a down payment DUE TO condition of the house. I have heard of them not lending to houses in un-livable conditions but never heard of a request for higher equity stake. Is this a thing???

He said that he would want a stipulation put in saying that if the bank requests more than 5% down, I will supply it. This way they haven’t been tied up in a contract and need to find a new buyer if this occurred. I understand trying to protect themselves from losing a sale and having longer holding costs, but just didn’t think this would be something the bank would ask. This stipulation would have a stop number. So say “buyer will put in higher down payment if bank requests it, up until 20%” or something like that.

I really don't get how this would happen especially because our agreed upon price is already $20k lower than what the as is appraised value came back at. (They had it appraised at $430k) Our sale price is $410. So my LTV from the get-go after the bank sends their appraisal will be more like 10-11%.

Now that I talk about it, that makes me think... is he trying to protect them if appraisal comes in lower due to any possible market corrections? If 4 months from now, the new appraisal comes in at $390, my bank will obviously not loan me on the $410 purchase price. Is his attorney trying to ensure I have to come up with the difference if this happens?! I will be sure that my attorney goes through this thoroughly so that the language states only if the bank requests more because of high LTV financing, NOT because of the possible changes in appraisal because they needed to drag out the selling process. 

@Harrison Busbee @Matt Wood @Dan Hertler

Hey R.J. You have come to the right place! I am also from Nassau county.. Currently investing in rental property in the Atlanta metro area. I will shoot you a PM, lets connect.

@Laurence Obi not bad. No exterior work needed? Roof was good? It looks newer.

The siding, windows, doors, all look great. Was that stone-work/veneer siding already there when you purchased? It looks great- that stuff is usually pricey, at least up in NY.

The house looks great- good job!!

I'm curious what your rehab consisted of. What did your scope of work cover for the $21,500?

Good morning BP.

There is a property for sale in Suffolk county, NY. One of my co-workers purchased it about a year ago, got divorced and now the ex is selling it. It is a single family house but has two units in the main building and a cottage in the garage building with separate meters.

The rents here are $4k for a $250k purchase so the numbers are beautiful. I do not like the idea of not doing things by the books and it doesn’t seem like this one would ever be able to be made legally multi-family.

Should I take my chances and go ahead with it anyway? What kind of repercussions occur if the town were to find out about something like this?