Real Estate Tricks

[ice-c]

I am gonna post these from time to time...as I figure them out.....

Did ya'll know.....

that....

if you are trying to buy a home and the bank is saying that you can only qualify for 90% of the value...meaning that you have to come to the table with 10%....plus your closing costs.....that you could structure it like this

Seller: asking price 90k.
Buyer: tell the seller you will give them 103k, but they will lend you the 10k plus throw in 3% of your closing costs....and that the 10% loan they are giving you wil be forgiven after the deal is done.

EVERYBODY happy. A. The seller gets what they want 90k. B. You get what you want...a new home with NO MONEY DOWN.

the trick: A. The deal is between YOU AND THE SELLER and a Broker that understands the term "shadow loan" or "forgiveable loan" B. The property must appraise for 103k.....which is easy for most areas...to find comps to justify that appraisal.


any questions?

[Big Moo]

There are loans that can be structured to finance 100%. My wife and I are about to buy a house and it is for 100% financing and we will also include in the contract that the seller will pay closing costs.

Also, when dealing with a seller, you can ask them for whatever you want and if they agree to it, then it can be added into the contract. A friend of mine just bought a house and he told the seller it needed new windows so they negotiated a price of $4000 for new windows and he also included the seller paying down payment. When they closed on the house the seller gave him a check for $4,000.

[ice-c]

yes, 100% loans are great........

but if u don't have the credit...it won't happen.

and

if u r not using it as a primary residence...it can be tough.

[Brightness]

. . .you're proposing to get a "doctored up" appraisal?

I would think that would maybe backfire at some point in the future if the value is inflated by 13K?

[ice-c]

no....
the key to this is the appraisal...if u can't get a good appraisal at the amount...

u can't do the deal....

but the key...is if the person is asking 100k...it may be that they are already asking below the appraised value.....and if you know about this deal ...u search for a property that is asking below the comparable values for that area......

[Brightness]

. . okay. . .

[Big Moo]

. . .you're proposing to get a "doctored up" appraisal?

I would think that would maybe backfire at some point in the future if the value is inflated by 13K?


Some do "doctored up" appraisals but you don't have to do that in order to do a deal like this. It all depends on the price of the property vs. the value. If you are purchasing a home/ building for 100k, but it is valued at 110k, you can go to the seller and tell them to sell you the property for 110 and at the closing give you a certified check for 10k. You are basically taking out the equity at the time of purchase.

Now, in the vein of "doctored up" appraisals, if the property is being sold for 100k and is valued at 110k, you could ask the seller to sell it for 125k and give you a check for 25k. This isn't such a bad deal if you are buying the property for investment purposes, such as retal income. You can get any necessary repairs/ improvements done with that money, get residual income once tenants move in, and keep in indefinitely.

[ice-c]

doctored appraisals work with amounts as low as 100k.....125k.....


but most of the properties i target are above 300k....so the underwriter pays ESPECIALLY close attention to the appraisal.

but honestly if you can get away with it....why not? because it is probably a property you will be staying in...what do you care?

[Big Moo]

doctored appraisals work with amounts as low as 100k.....125k.....


but most of the properties i target are above 300k....so the underwriter pays ESPECIALLY close attention to the appraisal.

but honestly if you can get away with it....why not? because it is probably a property you will be staying in...what do you care?

True. As long as you can handle the note I say go for it.