All Forum Posts by: Tom S.

@Jacob Stevenson  Definitely agree with the above post, make sure you get the title for any creative finance deal.  That said, it looks like you'd have to bring a huge downpayment to the table for this deal.

Why not just purchase with conventional financing?

@Minh Vu  You need to look at the mortgages to see the exact terms.

I'm assuming the value of this property is far greater than $175k, which is why you're pursuing this?  Can you post the numbers?

@Dan N.  I believe most house insurance policies have a standard minimum anyway, typically $300k is the standard that comes with a fire insurance policy.  But to the excellent point above, for liability you should definitely go higher and it's usually not too much more expensive.

@Joe C. There's a fairly active REIA in Burlington you should try to look up.

@Timothy Cooper  One of my first deals like that I did, I had an equity partner put up the downpayment, and I got the loan in my name, and then we split everything 50/50 after that.  That way we each had something into the deal.

That worked for us, so something to consider when seeking partners.  Hope that helps and good luck!

@Adaze Foltz  Depends too if you're flipping and seeking money for short term projects, or long term rentals.

- For the reasons posted above, for short term, PML is definitely great.  

- For long term rentals, traditional financing is my Go To for the long term buy and hold.   During the pandemic, I refinanced some of my rentals into 3% 30 year terms.  You'll almost always get the best rates and longest terms with conventional financing.

@M. Greger   In addition to the great advice above, most lenders will require proof of funds to start the project, as you'll have to "front" the rehab funds to get started, then the property will be inspected and the rehab funds released from the lender according to a draw schedule.  

Typically they'll look for additional reserve funds in your name to make sure you can still complete the project in case it goes over budget.

@Dawit Wo  Bear with me for asking, why would you agree to 5k down and 0% interest?  Why not just sell it outright and invest in something with more interest?  Even a risk free CD is offering 4-5%.

Regarding the steps, generally that's correct.  I've purchased a number of SF deals in VT and it's handled by an attorney.  I would still use a good real estate attorney in OK who's done SF deals before.

@Daljit S.  Sorry to hear.  Although I'm not based in NJ, I would still recommend getting the initial paperwork going.  Typically a Notice to Pay or Quit (the wording may vary by state).  

That at least serves notice and gets the clock moving.  Many times they will respond.  If they don't, hire an attorney.  It's money well spent.  

Good luck!

@John Currey  The $55k loan amount could definitely be an issue.  What was the specific reason for the loan denial?