All Forum Posts by: Nick Merryman

Doesn't the 'delayed financing exemption' apply to exactly this case? It's an exemption to the 6 month refi timeframe, to allow cash buyers to quickly cash-out refi.

https://selling-guide.fanniemae.com/Selling-Guide/Origination-thru-Closing/Subpart-B2-Eligibility/Chapter-B2-1-Mortgage-Eligibility/1745493761/What-are-the-requirements-for-a-delayed-financing-exception.htm

You'll have cashout rates though (which are quite a bit worse right now), not purchase rates

Hey @Rashad Brooks,

I just sent you a colleague request with my contact info. Always looking for good contractors! 

Maybe I'll even buy some properties from you and use him to rehab them ;)

Best,

Nick

@Thomas Hennessey -- I don't have any properties to offer you (I'm looking for the same thing!), but wanted to say 'hi'.  I think I recall getting a piece of direct mail from you shortly after purchasing one of my multi-family properties that I wanted to keep! :)  How are those mailings working out for you in this area??

If you come across any opportunities that seem good but are a larger rehab project than you want to undertake at the time, please get in touch and I'll buy them!  I don't mind e.g. a run-down duplex for $20k than needs $50k of rehab

Not to hijack this thread, but I'm curious what you mean here?  

Just that you can't get free list data in NC? Or there's going to be something lacking in ALL list data (even purchased through e.g. listsource) for NC data?

Preface: Daniel and I are working this deal together

@Wayne Brooks our lawyer specializes in creative real estate deals.  She has full confidence that the the lender is unable to invoke the due-on-sale clause with the structure she sets up for a subject-to deal.

The cliffs notes version is that the property is put into a trust, which the seller maintains a partial interest in. Since he still maintains an interest in the property, beneficial interest in the property has not been transferred, and the due-on-sale clause is not triggered. It's similar to putting a property in a trust for estate planning purposes, which is done all the time.

Back to the question at hand: we're interested in advice on screening potential buyers, if anyone has thoughts!

@Nalo Coban , it looks like you're in NC too.

As long as it appraises, I know that [REMOVED] will do a cash-out refi up to 75% of your total basis, with no seasoning requirement.

So if you buy for $55k and spend $40k rehabbing with a hard money lender, you've spent $95k.  After it's rehabbed, BofNC will let you do a cash-out refinance with a loan of $95k * .75 = $71250, as long as it appraises at $95k or higher

It's not as good as lending on ARV, but it's hard to find a bank that will give a loan on appraised value when you recently purchased it for much less

@Ron Drake Thanks.  And you're right, I don't have real numbers yet -- she's going to bring paperwork when we meet.  The plan is definitely to do our homework and make an offer on the spot, and get the ball rolling to close before the auction date.

I was hoping to get a feel for what the trustee/auction fees would likely be, so I can get her a fair amount and still get a good deal for me.  It sounds like she'd probably sell it to me for the payoff amount just to make this all go away, but I don't think I could do that if she'd end up with a big payoff out of the auction.  Though I suppose I'd still be saving her from the foreclosure.

@Jay Hinrichs This one's only been going for 6-8 months.  Not sure about back taxes, but I've got to assume at least half a year's worth.

So I have a seller I'm talking with a lot of equity in her house, but she's about to be foreclosed upon -- her auction date is scheduled for mid-January, so the timing is getting tight.  We're going out to the property later this week, and I wanted to be prepared!  I haven't seen any discussion on foreclosures with this much equity.

Her mortgage (not including backpayments/penalties) is around $20k. The auctioneer apparently told her he expected it to go for around 50-60k at auction. ARV is 90-100k.

For round numbers, let's assume 20k in principal balance, 5k in backpayments+penalties, and it sells for $50k at auction.  What is she likely to see back in her pocket out of that auction scenario?  What sort of fees/costs are typically involved?

@Chris Martin Thanks for linking to that NC statute; it's something I wasn't aware of.

Based on my reading of it...

• If I don't promise they can stay in the house or buy it on a lease option/subject-to or in some manner that they retain a beneficial interest, it's not considered a 'foreclosure rescue transaction' and this doesn't apply at all.  In that case, I imagine you can wholesale like usual without additional liabilities?
• If I want to buy it subject-to and to buy it myself, I have to pay at least 50% of the appraised value per this statute

Is that your understanding as well?

@Daniel Kowal that's a great idea to go and actually dig through the physical files instead of relying on the information on the terminals!  Definitely very time consuming, but it seems like you'll get high quality leads that way! 

Have you had success marketing to names you obtained this way?