All Forum Posts by: John J.

If I were to have a new home built, doing the general contracting myself using a bridge loan, would I be able to refinance the potential equity via the VA loan program? Example: total build out $175k...value $250k...cash out $75k.

I know the initial answer is to start an new business...let the business build the house, and purchase later allowing the profits to fall into the company. But then it goes to how does a new company get the funds necessary to build out the home?

If this is a home that best suits your family needs, the first thing I would do is pull your personal credit report to ensure full accuracy.  Then, I'd contact several banks speaking to mortgage experts explaining your situation that you need x amount of money for a home and tell them of the obstacles you face.  Then ask them if there's a program to help you with free credit repair or for a referral to another company/person that can help.  The golden answer you're looking is how long will it take you to qualify for the loan amount needed to secure the property.

Once you have this information, I'd submit an offer for owner finance with inspection contingencies, a little bit of earnest money, and the terms (down payment, interest rate, who pays 3rd party fees to collect payments from you/distribute to the owner, term used for payment, how long you have to obtain other financing, balloon payments etc.  Then I would provide as much information about yourself that you feel comfortable sharing as an addendum.  I'd submit a letter explaining why you want to purchase the home, how it fits for your family, rental history, work/personal references, information from the lender explaining the time frames for you to obtain your own financing.  When you're faced with what to share, just ask yourself what would provide peace of mind to the seller signaling you're a legitimate person that will take care of the property with a plan in place to obtain your own mortgage in the future.

As far as the realtor goes, I would find a different agent that has experience in drawing up owner financing deals.  The contracts can be quite complicated, and you might seek legal counsel in drafting up a specific one to meet your needs.  Be aware you might have to pay higher interest, more than the property is worth (in 2 yrs when you obtain financing, sometimes the seller wants to hedge against the appreciation by asking for a higher purchase price now), and fees you don't normally encounter in a bank financed transaction.  Be prepared to negotiate all the terms knowing paying the 3rd fees vs. a 1/2% interest might be the same amount of money at the end of the month.  The more familiar the realtor is with the process, the better off you'll be.

Tammy,

Thank you for the input, I'll definitely check some additional references from them.

Lease options tend to be a little tricky with real estate agents, mainly due to when the "sale" occurs.  Upon drafting all the paperwork, the sale doesn't commence until the buyer "exercises" the lease option, which triggers a transfer of ownership.  This leaves a potential for several months or even years to pass before a commission can be collected (upon transfer of ownership).  You might not ever exercise the option to buy leaving the realtor with no compensation.  With that said, you might want to discuss a fee you'll pay as a good faith measure on your part.

In terms of whether or not to try to contact the owner yourself, I would discuss this with your realtor.  Making the contact yourself might damage the relationship you have with a team member, if the realtor feels you're going out of your way to do his/her job.  It's always a good rule to maintain open communication with team members to avoid wrongful assumptions, plus it provides you feedback (what the realtor can do/not do to help) to see if the person is actually worthy of being on your team.

The realtor should also be able to provide you with searches specifically for owner finance properties.  You might also want to ask about references with banks the agent has; many banks offer a credit repair program to help you get your score up, putting you in qualification range of mortgages.

What is the difference between the national assoication of residential property mangers (NARPM) vs the institue of real estate mangement (IREM)? It seems like they do the same thing, but IREM offers certifications for commercial properties as well residential, any advice?

They don't have any available in the city.  Donna Farrow & Co has a certification from the institute of real estate management (IREM), are those similar?

I have been doing research into property management companies in St. Joseph, MO. Does anyone have any recommendations? Donna Farrow's company appears the best I have come across.