Quote from @Account Closed:
Quote from @Roscoe Deel:
Hello everyone! So I'm looking to buy a property from my cousins they inherited and want nothing to do with. It needs a lot of work. My plan: I wanted to do a quit claim deed to take possession of the property with no upfront cost so I could secure a personal loan to do the renovations. Once that is completed, I would get renters in for a couple months to show income. From there I would get a cash out refinance to payback the loan and my cousins for the property. My question is, do I need to get a real estate agent, go through a title company, or hire a real estate attorney to draw up a contract? What would the best route be? Thanks in advance for any help.
It's very unlikely you can get a personal loan on the property using a quit claim deed based on a deceased owner. The cousins aren't the owner yet and they can't sign a quit claim deed until probate is completed. You don't want a quit claim deed anyway for a lot of reasons. You want a Warranty Deed.
The first thing I would do is order a title report to see who is actually on title, what outstanding loans and liens and fines and taxes might be owed. If the title is "clean" or can be made "clean" then you proceed.
You would do an "owner financing" deal, once probate is completed.
Then set up escrow, decide on your price and terms. The cousins become the bank. Say it's $100,000 @ 4% for a 30 year loan, zero down, which is about $518.67 a month . You make no payments and that gets added to the eventual payoff. Or you can do a $100,000 zero down with no payments with the note due in 10 years or whatever ya'll agree to.
An attorney can help you with the note and mortgage. You don't need a real estate agent and an agent likely wouldn't know how to do this part anyway.
At escrow, the agent (or attorney) will take care of the rest of the transation so you all are protected and you will be able to find financing for your project.
Contact a mortgage broker (not a bank. Banks won't finance this type of deal) and run the scenario by them for advice on how to structure things so they can finance you when the time is right. Most lenders want some seasoning of a few months before they will provide financing. You may also find that someone in town (friend, family, doctor, dentist) has a pension fund or 401(k) they can fund your project with. Don't limit yourself to banks and mortage lenders.
Make sure you buy Homeowner's Insurance and pay the proeprty taxes.
This is the simplified version, your attorney will fill you in on the details.
Congratulations, sounds like a winner for all concerned.
@Mike Hern, I believe the probate is over. She said she only had to do small estate because she was already the owner of the land the house sits on. Would a Warranty Deed still be the best route? As far as the title report, I would just go through a title company for that, correct? With owner financing, we were looking at doing a deal that involved the ARV. Something like if it appraised under 200K I would give say 70K, if over 200K, I would give 85K.
