vmoney 0 Report post Posted June 3, 2004 Hi all, I have been rehabbing houses and making money for a few years. Recently read books and took classes on L/O and am ready to start moving on it. I actually have already sold on a L/O, but I owned the house. My concern is new seasoning requirements banks have imposed in light of some idiotic unethical investors trying to rip banks/others off. Anyway, most title companies who used to say they could do a "double closing" are now saying they can't thanks to banks tightening underwriting requirements for seasoning. My question...How do you get around this if your name is usaully not on title when sandwich l/o? I would like to hear from people who have actually closed in the last few months to get real world advice from experience. Thanks!!! Share this post Link to post Share on other sites
MichaelC 160 Report post Posted June 3, 2004 Hello, vmoney, and welcome to The Naked Investor.The seasoning issue is one that, I feel, is a bit overblown. I have found no shortage of mortgage brokers/title companies who can make the deal happen when the tenant/buyer is ready to exercise their option on a sandwich lease.My advice to the tenant/buyer is to tell them to start the financing process early on, so that if any glitches rear up there is ample time to deal with 'em. It comes down to finding mortgage and title people who are still investor friendly, and they are still out there. I know a few mortgage guys on this board personally, and they can get these deals done. (In fact, I'm moving this thread to the Financing Strategies Forum, where I think it is a better fit).Another way around the seasoning issue is to use a Performance Mortgage, thus allowing you to receive your due at closing to pay off the "lien" you have placed on the property. Share this post Link to post Share on other sites
lacashman 0 Report post Posted June 4, 2004 Several companies will allow a tenant/buyer to get a refinance loan rather than a purchase mortgage. If they have been leasing for 12 months. Just show your paperwork showing an interest in the property. So that is one way. But if you shop around you can find lenders who will do non seasoned loans for O/O without a problem. If you have a big price increase be ready to show what you did to raise the value. I recomend to all of my clients that they keep a log book. First take lots of "before pics". Then keep a log of everything that you do to the property, along with all receipts. Besure to document your time. Then take "after pics". Then if your asked to justify the increase in value you just hand over a copy of the log. Share this post Link to post Share on other sites
vmoney 0 Report post Posted July 22, 2004 Just a quick update. Has anyone actually cashed out of a sandwich L/O in recent months? I have been talking to quite a few banks and brokers and have not found any one able to cash me out on a L/O if I am not on title. I belong to 3 real estate clubs in my local area and have spoken to a few "investor friendly" brokers that attend the meetings. many of them say that as early as six months ago they could close a sandwich, but are now saying this is not possible without putting the home in a trust or actually getting a mortgage on the property. Are any of you with experience finding it more difficult to get cashed out? If anyone has a lead on a good broker that can help me with this in the Detroit area please let me know. Thanks,Vito Share this post Link to post Share on other sites
Gene 0 Report post Posted July 22, 2004 I have a thought on this issue. I don't have the answer, I just think that there has to be a way to make this a non-issue. Lets say for the sake of argument that all mortgage brokers and banks around the world now have a seasoning requirement and double closing's are now impossible to get done. What would this do to the vehicle knows as a sandwich lease/option? I would think that changing the language of our agreements to state that when the T/B decides to exercise his option we are required to assign our interest in the deal over to the T/B. There is now no reason to do a double closing. Our back-end profit would be paid at closing. It seems to me that closing agents distribute funds for all types of debts at closing. Why would a real estate agent, a mortgage broker, mechanics lean holder, IRS, etc. all be able to get there interests settled at closing and not the person who structured the deal. Am I way off here? Gene Share this post Link to post Share on other sites
-Tony- 0 Report post Posted July 23, 2004 Here is what I would do, oh wait I do do. Talk to your attorney and have him draft a "POA coupled with an interest". It gives you the right to sign and cash checks for the owner. It is a specific POA for real estate. what I do is pitch it as a benefit to the owner (no closings to go to), it is great if they are moving out of state. The plus side is they don't know what you made off it. ------edit-------------- P.S. I have owned a property for less than 2 month and am selling it. If your buyers broke needs money they will find a way. Share this post Link to post Share on other sites
vmoney 0 Report post Posted July 23, 2004 Tony, I know what a POA is, but what's the "interest?" Is that like a performance mortgage? Is it one document or two you use together? Thanks!!! Share this post Link to post Share on other sites
