All Forum Posts by: Jay Chekansky

Thanks for the detailed reply @Shari Bertsch. I reached out to Texas Pride Lending this morning, but they are not licensed in TN.  

@Rahul Bhatt Thank you for sharing the contact info. I'll be reaching out to them shortly.

Hey BP, I'm looking for some help from the group. I'm selling a recent rehab with owner financing. The plan is to generate the note for the buyer, discount it, and sell it to a private long term lender. My understanding is that to comply with Dodd Frank requirements, the buyer needs to be qualified through a residential mortgage loan originator? I've made a number of calls to Johnson City TN area mortgage brokers, but no one seems to be familiar with an owner finance deal like this. Can anyone refer me to a broker or independent loan officer that is familiar with owner financing deals? Any and all help is appreciated. Thanks, Jay

Originally posted by @Siana C.:

Jay, 

Your account of this flip was useful. I'd like to follow you but wonder if you are still active on BP...?

Please advise. Thanks.

Hi Siana,

I am still active. I've just wrapped up a few deals and need to update my deal diaries. Thanks for your interest and feedback

Jay

To close the loop on this one - The house closed yesterday, and thankfully, without any major issues associated with allowing the buyers to move in before closing.

Lessons learned.  Thanks for the help.

Great feedback from both. Thank you.

Ashley, not making other people's problems my problems are words to live by, inside and outside of REI.

Thanks for the help!

Hey BP,

I'm hoping to learn a few lessons from a what happened to one of my house flips recently.

I finished off a house flip (the work) back in early February.  The house was under contract the first week of Feb. The buyers came "pre-qualified" (term used loosely to say the least), the house appraised above the contract price.

The buyers were going to use an FHA loan - as it turns out, they didn't have the money for the 3% down payment or closing costs. I offered to cover 1/2 of the closing costs to help speed thing along. The entire time, my realtor is telling me closing will be next week, then next week, then end of March, etc. I'm asked if I'd do a favor and allow the buyers to move into the house since their existing rental lease was up at the end of March. So I sign a possession before close lease agreement with a 14 day time frame. Then I find out that the buyers had to have one of their parents refinance his primary residence to provide them with down payment money. When that finally goes through, the underwriter finds that one of the buyers is lacking the credit worthiness to be on title/mortgage. Now, one of the buyers fathers is going to have to be on the loan.

In the mean time, I finally got a more thorough lease agreement in place and have collected a few months of rent.

I'm hoping to never go down this path again with what turn out to be unqualified buyers. 

Moving forward, what do you guys and gals suggest to avoid this scenario?

Should I have asked for increases to escrow money along the way?

Thanks,

Jay

I wanted to close the loop on this thread, but had been holding off because I didn't want to jinx myself.  I finished working on the house in early February, it's been under contract since then, and now I'm waiting on the bank and the buyers to get their Dodd-Frank crap together.  It's been frustrating to say the least.  The good news is that new owners are staying at the house and paying rent.

So I'll circle back and rerun the numbers:

Purchase Price: $67,000 (Previous owner carried a $40k note for 12 month at 0%)

Rehab Costs: $13,500 

Holding Costs: $1100

Closing Costs: $8800 (2 Closings + Realtor commission)

Purchase Price: $119,500

Estimated Expected Profit: $29,000

Out of Pocket CoC Return: 67%

hey Ryan,

Welcome aboard. If you're looking to build your network and surround yourself with like minded folks in the area, I highly suggest you come to the next CREIA meeting, held the second Monday of each month. Feel free to PM me for additional details and local resources.

Jay

Hey Chris, 

Welcome aboard. While i don't have direct answers for your questions, have you considered joining the local REIA as a means to build your network and find new deals?

Our next meeting is this coming Monday night. PM me for details if interested.

Jay

Hey Luke,

I'm in Asheville. Feel free to contact me if you have questions or need referrals for help moving, finding a realtor, insurance, etc. I'm happy to help out.

Jay