All Forum Posts by: John Edwards

Earlier this year I saved the life of an old friend who has five homes both here in the US and the Philippines. He and his wife feel very strongly about selling me a vacant home of theirs I've considered buying in the past. The property has an estimated FMV of 365K and they are willing to sell to me for 225. But my income and credit are shaky after the events of 2020 ravaged my small business. I'd like to move into the home, extracting equity at the sale, spending a modest some on renovation (less than 20K), and use the remaining capital to invest in other BRRR ventures.

Because I have shaky credit (no late payments or defaults, but debt-to-income that's too high with 30% credit utilization), I cannot get anyone to offer me a loan. I tried a broker for FHA 203k and various local hard money lenders but everyone wants the same terms as the banks: credit score over 700, 25% down!

I have 40 grand in cash but am trying to obtain an 85% LTV with a 10% (or less) down payment. Can anyone offer any good ideas?

Thank you for your replies. Can either of you gentlemen - or anyone else here - advise if it would be possible to structure this purchase as a business loan? I mean, understanding I may not be able to qualify for a mortgage at this amount irrespective of renovations I would still like to make said renovations and (if nothing else) resell it immediately for potentially a six-figure profit. 

Are there any lending instruments or banks that would finance a deal like this if I were stipulating it as a business deal, possibly forming an LLC?

Is there any other kind of financing available for real estate purchases that do not involve a typical mortgage with all its debt-to-income requirements? Every hard money lender I've talked with basically wants all the same criteria of a bank (or more) but with higher fees. I've looked around as best I can and can find no other forms of alternative lending for a deal like this, wherein a buyer has a home under agreement that - by all accounts - is worth 170% more than the asking price!

I would like to purchase a property from my friend who has a mortgage on the property and would like to sell me the home for no money down. We would like to set a kind of promissory note situation wherein I take possession of the property with rights to refinance or resale once renovations are complete. I would pay 5% interest above the agreed-upon price and the note would have a duration of one year.

Can anyone direct me to a template for a contract we might use to get to closing?

I have a property under price agreement that I would like to proffer to hard money lenders and/or solicit takers for a contract flip. Is there one central clearinghouse to list such a deal? I would like to sketch the broad outlines of the deal, the property's value, etc. and entertain offers from one place, eliminating the need to post the same inquiry to scores of different lenders/investors.

Alan, thanks for the reply. Do you have any advice on how one would pursue such a wholesale flip?

I have a friend who (for various reasons I won't go into here) has a property he needs to sell quickly and that I have offered to buy. It's a residential home that needs some significant interior work to make it desirable. The house has a tax-assessed value of roughly 300K, a Zillow FMV estimate of roughly 350K and I have a signed agreement with my friend for 225.

I think there is value there but after having been through the house a couple of times and having shown it to a contractor for advice on a renovation, I'm not sure how best to get that value out of it. My ideas:

1. Renovate (which apparently will cost well over 100-150K but could improve its value)
2. Tear down (build something new on spec, maybe? I don't have the cash to build out of pocket)
3. Subdivide (it's a lot that's roughly 2.75 times the usual in this upscale area)
4. Or just look to flip it (where would I even begin? My price agreement is good for 90 days)

Any constructive advice from those who have done this kind of work before is much appreciated. I'm looking for help on what might be my best course of action for financing as this was a very sudden opportunity and I only have about 10K in cash at the moment.