entertaining post from brokeroutpost.com

[jpinpb]

Bugs – Maybe I’m not clear or I’m not following you. I apologize for being a little dense or slow. I want to buy the place. I don’t think it’s a construction loan. Are you saying that’s what I need to get?

I want to buy the place, take out a loan to buy it. Looking at 450k – 500k. Yet I’m told b/c of the condition of the place, no kitchen or bath, I guess uninhabitable? I’m told no bank will lend on it.

So now I’m trying to figure out how to get money to buy the place, then I’ll fix it up. Then once fixed, I guess, I can get a bank to give me a regular 30 yr fixed.

Are you saying I can get around all this by getting a construction loan of 500k using the house I’m interested in purchasing as collateral? I am not too concerned about the interest rate being higher. I’m sure it will be. I only want to do it short-term, so I guess make sure no pre-payment penalty. This way, once it’s fixed, I can get a normal 30 yr fixed on the place.

Alternatively, I’m co-owner of a commercial lot off the 210 Freeway, and I thought perhaps I can use that to get a loan to buy the house, then again, once fixing the house, take out a 30 yr fixed and pay off the loan on the commercial. Or at a minimum, use some of the different raw lands I own as collateral. It adds up to more than what I’m looking to get for a loan.

Edit: Or are you saying to take a construction loan against the freeway lot?

I would think I’d have to own the property before they give me a construction loan, so I wouldn’t be able to get a construction loan on the house if I don’t own it yet.

Sorry. I’m a little confused. If you could please help me understand.

[Anonymous]

Without knowing the exact condition of the house it is hard to give you too much info here, but it is unlikely that a bank would finance the house as an SFR without any kitchen or bath as it would not meet standards of occupancy. If this is a half done permitted remodel, all of the inspections would need to be signed off and all outstanding liens released before you could get conventional financing.

My gut feeling is that you would have very little luck getting a bank to lend using raw land as collateral today. People are dumping options on land left and right. If they would entertain land as collateral, you would likely have to tie up raw land value well in excess of what you are looking to borrow. No cash needed but terrible rates.

The construction loan is an option but you would need to go to the bank with full docs, i.e. purchase price info, competing bids from contractors to do the work necessary to fix the house, and an appraial of value when done. And they are going to want you to bring 25% cash to the table minimum. Cash needed probably 75-100K

IF it was me and I really wanted the house… speaking totally hypothetically here… I would buy a 6 month option to purchase the house at my price, pay the current mortgage myself during the option period, get a contractor in to hammer the place back together out of pocket, then go finance the place as an SFR at the option price. This all revolves around the house not being under water. If this is a short sale all bets are off as once you fix the house you have improved the house to the point that they may not want to let it go so cheap.

If it is under water your best bet would be to wait for the forclosure then approach the bank with an offer that they finance the construction loan as a mini-perm that would roll into permanent financing afetr repairs are made. They will be much more apt to work with you to get it off their books. I have seen several of these around listed as cash only with POSSIBLE financing through the bank that holds the REO.

As always… advice worth what you paid for it.

[Anonymous]

Without knowing the exact condition of the house it is hard to give you too much info here, but it is unlikely that a bank would finance the house as an SFR without any kitchen or bath as it would not meet standards of occupancy. If this is a half done permitted remodel, all of the inspections would need to be signed off and all outstanding liens released before you could get conventional financing.

My gut feeling is that you would have very little luck getting a bank to lend using raw land as collateral today. People are dumping options on land left and right. If they would entertain land as collateral, you would likely have to tie up raw land value well in excess of what you are looking to borrow. No cash needed but terrible rates.

The construction loan is an option but you would need to go to the bank with full docs, i.e. purchase price info, competing bids from contractors to do the work necessary to fix the house, and an appraial of value when done. And they are going to want you to bring 25% cash to the table minimum. Cash needed probably 75-100K

IF it was me and I really wanted the house… speaking totally hypothetically here… I would buy a 6 month option to purchase the house at my price, pay the current mortgage myself during the option period, get a contractor in to hammer the place back together out of pocket, then go finance the place as an SFR at the option price. This all revolves around the house not being under water. If this is a short sale all bets are off as once you fix the house you have improved the house to the point that they may not want to let it go so cheap.

If it is under water your best bet would be to wait for the forclosure then approach the bank with an offer that they finance the construction loan as a mini-perm that would roll into permanent financing afetr repairs are made. They will be much more apt to work with you to get it off their books. I have seen several of these around listed as cash only with POSSIBLE financing through the bank that holds the REO.

As always… advice worth what you paid for it.

[Anonymous]

Without knowing the exact condition of the house it is hard to give you too much info here, but it is unlikely that a bank would finance the house as an SFR without any kitchen or bath as it would not meet standards of occupancy. If this is a half done permitted remodel, all of the inspections would need to be signed off and all outstanding liens released before you could get conventional financing.

My gut feeling is that you would have very little luck getting a bank to lend using raw land as collateral today. People are dumping options on land left and right. If they would entertain land as collateral, you would likely have to tie up raw land value well in excess of what you are looking to borrow. No cash needed but terrible rates.

The construction loan is an option but you would need to go to the bank with full docs, i.e. purchase price info, competing bids from contractors to do the work necessary to fix the house, and an appraial of value when done. And they are going to want you to bring 25% cash to the table minimum. Cash needed probably 75-100K

IF it was me and I really wanted the house… speaking totally hypothetically here… I would buy a 6 month option to purchase the house at my price, pay the current mortgage myself during the option period, get a contractor in to hammer the place back together out of pocket, then go finance the place as an SFR at the option price. This all revolves around the house not being under water. If this is a short sale all bets are off as once you fix the house you have improved the house to the point that they may not want to let it go so cheap.

If it is under water your best bet would be to wait for the forclosure then approach the bank with an offer that they finance the construction loan as a mini-perm that would roll into permanent financing afetr repairs are made. They will be much more apt to work with you to get it off their books. I have seen several of these around listed as cash only with POSSIBLE financing through the bank that holds the REO.

As always… advice worth what you paid for it.

[Anonymous]

Without knowing the exact condition of the house it is hard to give you too much info here, but it is unlikely that a bank would finance the house as an SFR without any kitchen or bath as it would not meet standards of occupancy. If this is a half done permitted remodel, all of the inspections would need to be signed off and all outstanding liens released before you could get conventional financing.

My gut feeling is that you would have very little luck getting a bank to lend using raw land as collateral today. People are dumping options on land left and right. If they would entertain land as collateral, you would likely have to tie up raw land value well in excess of what you are looking to borrow. No cash needed but terrible rates.

The construction loan is an option but you would need to go to the bank with full docs, i.e. purchase price info, competing bids from contractors to do the work necessary to fix the house, and an appraial of value when done. And they are going to want you to bring 25% cash to the table minimum. Cash needed probably 75-100K

IF it was me and I really wanted the house… speaking totally hypothetically here… I would buy a 6 month option to purchase the house at my price, pay the current mortgage myself during the option period, get a contractor in to hammer the place back together out of pocket, then go finance the place as an SFR at the option price. This all revolves around the house not being under water. If this is a short sale all bets are off as once you fix the house you have improved the house to the point that they may not want to let it go so cheap.

If it is under water your best bet would be to wait for the forclosure then approach the bank with an offer that they finance the construction loan as a mini-perm that would roll into permanent financing afetr repairs are made. They will be much more apt to work with you to get it off their books. I have seen several of these around listed as cash only with POSSIBLE financing through the bank that holds the REO.

As always… advice worth what you paid for it.

[Anonymous]

Without knowing the exact condition of the house it is hard to give you too much info here, but it is unlikely that a bank would finance the house as an SFR without any kitchen or bath as it would not meet standards of occupancy. If this is a half done permitted remodel, all of the inspections would need to be signed off and all outstanding liens released before you could get conventional financing.

My gut feeling is that you would have very little luck getting a bank to lend using raw land as collateral today. People are dumping options on land left and right. If they would entertain land as collateral, you would likely have to tie up raw land value well in excess of what you are looking to borrow. No cash needed but terrible rates.

The construction loan is an option but you would need to go to the bank with full docs, i.e. purchase price info, competing bids from contractors to do the work necessary to fix the house, and an appraial of value when done. And they are going to want you to bring 25% cash to the table minimum. Cash needed probably 75-100K

IF it was me and I really wanted the house… speaking totally hypothetically here… I would buy a 6 month option to purchase the house at my price, pay the current mortgage myself during the option period, get a contractor in to hammer the place back together out of pocket, then go finance the place as an SFR at the option price. This all revolves around the house not being under water. If this is a short sale all bets are off as once you fix the house you have improved the house to the point that they may not want to let it go so cheap.

If it is under water your best bet would be to wait for the forclosure then approach the bank with an offer that they finance the construction loan as a mini-perm that would roll into permanent financing afetr repairs are made. They will be much more apt to work with you to get it off their books. I have seen several of these around listed as cash only with POSSIBLE financing through the bank that holds the REO.

As always… advice worth what you paid for it.

[jpinpb]

Any feedback on this board is appreciated. I may just be spinning my wheels anyway, b/c it looks like the second on the place doesn’t want to play ball. Yeah. It’s a short sale. The first reduced drastically. Second is uncooperative. Makes no sense to me b/c certainly if it goes to foreclosure, it will probably sell well below what is owed on first in the condition of the place, so the second will be wiped out, no? Isn’t that the way it works? Seems like they’d be willing to take something less, rather than nothing at all.

I was hoping to make it happen before it went to foreclosure. Who knows what will happen then. Will the bank fix it and sell for way more $$$$? Will it price it low and get a bidding war and some developer scoop it up?

That’s why I was scrambling to figure out how I could get it now. The raw commercial land sitting on the freeway is worth 3xs the amount I’m looking to get. That’s why I thought it might be doable.

[jpinpb]

Any feedback on this board is appreciated. I may just be spinning my wheels anyway, b/c it looks like the second on the place doesn’t want to play ball. Yeah. It’s a short sale. The first reduced drastically. Second is uncooperative. Makes no sense to me b/c certainly if it goes to foreclosure, it will probably sell well below what is owed on first in the condition of the place, so the second will be wiped out, no? Isn’t that the way it works? Seems like they’d be willing to take something less, rather than nothing at all.

I was hoping to make it happen before it went to foreclosure. Who knows what will happen then. Will the bank fix it and sell for way more $$$$? Will it price it low and get a bidding war and some developer scoop it up?

That’s why I was scrambling to figure out how I could get it now. The raw commercial land sitting on the freeway is worth 3xs the amount I’m looking to get. That’s why I thought it might be doable.

[jpinpb]

Any feedback on this board is appreciated. I may just be spinning my wheels anyway, b/c it looks like the second on the place doesn’t want to play ball. Yeah. It’s a short sale. The first reduced drastically. Second is uncooperative. Makes no sense to me b/c certainly if it goes to foreclosure, it will probably sell well below what is owed on first in the condition of the place, so the second will be wiped out, no? Isn’t that the way it works? Seems like they’d be willing to take something less, rather than nothing at all.

I was hoping to make it happen before it went to foreclosure. Who knows what will happen then. Will the bank fix it and sell for way more $$$$? Will it price it low and get a bidding war and some developer scoop it up?

That’s why I was scrambling to figure out how I could get it now. The raw commercial land sitting on the freeway is worth 3xs the amount I’m looking to get. That’s why I thought it might be doable.

[jpinpb]

Any feedback on this board is appreciated. I may just be spinning my wheels anyway, b/c it looks like the second on the place doesn’t want to play ball. Yeah. It’s a short sale. The first reduced drastically. Second is uncooperative. Makes no sense to me b/c certainly if it goes to foreclosure, it will probably sell well below what is owed on first in the condition of the place, so the second will be wiped out, no? Isn’t that the way it works? Seems like they’d be willing to take something less, rather than nothing at all.

I was hoping to make it happen before it went to foreclosure. Who knows what will happen then. Will the bank fix it and sell for way more $$$$? Will it price it low and get a bidding war and some developer scoop it up?

That’s why I was scrambling to figure out how I could get it now. The raw commercial land sitting on the freeway is worth 3xs the amount I’m looking to get. That’s why I thought it might be doable.

[jpinpb]

Any feedback on this board is appreciated. I may just be spinning my wheels anyway, b/c it looks like the second on the place doesn’t want to play ball. Yeah. It’s a short sale. The first reduced drastically. Second is uncooperative. Makes no sense to me b/c certainly if it goes to foreclosure, it will probably sell well below what is owed on first in the condition of the place, so the second will be wiped out, no? Isn’t that the way it works? Seems like they’d be willing to take something less, rather than nothing at all.

I was hoping to make it happen before it went to foreclosure. Who knows what will happen then. Will the bank fix it and sell for way more $$$$? Will it price it low and get a bidding war and some developer scoop it up?

That’s why I was scrambling to figure out how I could get it now. The raw commercial land sitting on the freeway is worth 3xs the amount I’m looking to get. That’s why I thought it might be doable.

[Bugs]

The construction loan is an option but you would need to go to the bank with full docs, i.e. purchase price info, competing bids from contractors to do the work necessary to fix the house, and an appraial of value when done. And they are going to want you to bring 25% cash to the table minimum. Cash needed probably 75-100K.

This is exactly what I’m talking about – financing that would allow purchase of the property with the repair costs. The repairs are the “construction” to which I was referring.

The lender would fund-control the repair costs to make sure the work got done and when it’s finished the property would conform to conventional lending criteria. At that point you could go to a conventional lender and get a long term loan on it.

And yes, there are a few lenders that might accept another property as additional collateral. Finding one that would take vacant land on might be tough right now due to market conditions, though.

[Bugs]

The construction loan is an option but you would need to go to the bank with full docs, i.e. purchase price info, competing bids from contractors to do the work necessary to fix the house, and an appraial of value when done. And they are going to want you to bring 25% cash to the table minimum. Cash needed probably 75-100K.

This is exactly what I’m talking about – financing that would allow purchase of the property with the repair costs. The repairs are the “construction” to which I was referring.

The lender would fund-control the repair costs to make sure the work got done and when it’s finished the property would conform to conventional lending criteria. At that point you could go to a conventional lender and get a long term loan on it.

And yes, there are a few lenders that might accept another property as additional collateral. Finding one that would take vacant land on might be tough right now due to market conditions, though.

[Bugs]

The construction loan is an option but you would need to go to the bank with full docs, i.e. purchase price info, competing bids from contractors to do the work necessary to fix the house, and an appraial of value when done. And they are going to want you to bring 25% cash to the table minimum. Cash needed probably 75-100K.

This is exactly what I’m talking about – financing that would allow purchase of the property with the repair costs. The repairs are the “construction” to which I was referring.

The lender would fund-control the repair costs to make sure the work got done and when it’s finished the property would conform to conventional lending criteria. At that point you could go to a conventional lender and get a long term loan on it.

And yes, there are a few lenders that might accept another property as additional collateral. Finding one that would take vacant land on might be tough right now due to market conditions, though.

[Bugs]

The construction loan is an option but you would need to go to the bank with full docs, i.e. purchase price info, competing bids from contractors to do the work necessary to fix the house, and an appraial of value when done. And they are going to want you to bring 25% cash to the table minimum. Cash needed probably 75-100K.

This is exactly what I’m talking about – financing that would allow purchase of the property with the repair costs. The repairs are the “construction” to which I was referring.

The lender would fund-control the repair costs to make sure the work got done and when it’s finished the property would conform to conventional lending criteria. At that point you could go to a conventional lender and get a long term loan on it.

And yes, there are a few lenders that might accept another property as additional collateral. Finding one that would take vacant land on might be tough right now due to market conditions, though.

[Author]

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