Will this Work?

[drk 0]

1. I can put pretty houses under contract for 10 to 15% discount of the appraised value. These properties are listed on the MLS through realtors.

2. I then put the property under a second contract for the full appraised value with a good to great credit investor. 3. We do a simultaneous close.

4. The property closes into a land trust with the credit investor as a 51% beneficiary and a sub-prime buyer as a 49% beneficiary.

5. We escrow 3 to 4 payments in the name of the land trust to back up the deal.

6. The sub-prime beneficiary goes to get a refinance for the purpose of cashing out his partner (the other beneficiary).

7. The subprime buyer can show the trust account on his 1003 because he really is the owner.

Will this work and if so who can do the good credit loan and the sub-prime refinance?

[Brian - L.V. 0]

Hello. Welcome to forum. I can tell you that this forum is absolutely priceless. A lot of experience and good advice to be had here. Plus the price is right....

 

One thing I have to ask is why do you want to make it so complicated? Being creative is great, but not just for the sake of being creative, you know what I mean?

 

If I understand what you're trying to do, it sounds like to want to aquire houses at below market value, take on a partner to purchase the house from you at appraised value, and turn around and sell it to a sub-prime buyer for even more than appraised value? Is that right? How does your partner benefit if they're supposed to pay you full value?

 

One thing I'd keep in mind is if you're looking to purchase houses with only 10-15% equity, closing costs will eat up part that profit, especially if you're thinking of doing a double closing. Plus depending on your market, you could end up becoming the motivated seller if comps go down. If anything some more information on what you're exactly trying to do would be helpful. Take care!

[stustanton 0]

DRK,

 

You will be faced with one problem. Most lenders I know and work with will require 12 months seasoning before you can refi. We set up our trust for a minimum of 12 months just for that reason. Now, your sub-prime buyer may still be able to get financing, just has to be a new purchase loan, stricter credit requirements (ans seasoning may still be an issue).

 

If I may be so bold, you may be able to cut out the middle person. I have a program where our private investors will purchase the home from you and owner finance it to you end (subprime) buyer.

 

The mortgage company, I work for, can do your loans, both the credit loan (up to 100%LTV NOO) and the subprime financing, though a 100% financing may be tricky.

 

Let me know,

Stu Stanton

www.stantonloans.com

For private investor loans call:

(406) 285-3717 (office 9-6 MST)

(877) 841-8412 (message and fax)