All Forum Posts by: Angela Carter

Jon,

I'll give you scenario with numbers so you can better understand this deal.

The purchase from the bank to my LLC would be 30k. The purchase from the LLC to myself would be $100k (minus the "down payment"). This is a 65k difference. The estimated appraised value is currently $110k with an ARV of $125k. (It appraised for $132k in 2007).

Now, the note buyer stated he would pay 85% of loan amount for the note which is $80.75k. From this amount, I pay off the transactional funder, closing costs and fees to the individual who found this note buyer which is about $42k total. This leaves $38.75k at the closing table. Yes, there is still a loan for $95k however, once I implement the repiars and renovations with about $12k and rent the property out which is a cash flow rent roll of about $2k per month I can refinance after 6 months at the new appraised value of $125k. This pays off the note buyer and gives me a more normal interest rate.
I am a new investor, but I think those numbers are in line with a great deal? Don't you?

Yes, I am in the process of begging or borrowing but have not had any luck yet. My LLC would be purchasing with cash however the funds are given througha transactional funding source which supplies all funds except the emd. The only reason I would owner finance is to sell the note to the note buyer as opposed to a cash buyer. This way the A-B funds are there as well as the B-C funds.

Is there any way at all of getting around this when dealing with a bank? Especially since the property has been on the REO market for at least 7 months! You would think that they would be thrilled to get it off the market even if there was a chance the deal would fall through. A bird in the hand is always better then two in the bush, right?

Has anyone found a creative way to either avoid having to put down the EMD or a source who might supply such when dealing with a bank? :idea:

I have a potentially AWESOME deal and need a creative way to get around this obstacle:

There is an REO for 30% below appraised (1k emd needed), no one in my area wants to deal with it (needs work) but has great cash flow potential. My LLC would purchase it from the bank via transactional funding and I will purchase it from my LLC via owner financing for 100% current value. There is a note buyer who will purchase the promissory note from the B-C deal for a discount, which will supply the funds to my flash funder all occuring on the same day. Leaving me at the table with a nice spread after closing costs. HOWEVER, the EMD is causing a major speed bump in the path to victory, as I am not prepared to supply it. Someone once said that obstacles are only excuses and I want to prove them right here.

Can anyone throw ideas out as to where this deposit might come from? All ideas and thoughts are welcomed!