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I need real estate/loan help(answers) on buying an investment property?

27 Mar

I am working with a realtor and a loan officer(which is good friend of realtor) on buying a home. Since neither me or my husband qualify to buy a house, my father-in-law is putting it under his name. He already owns a home, therefore it becomes an investment home. So we really want this house, but the loan consultant is making it very hard on us, and the realtor is confusing us. We made a proposal of $65k and the seller would help us with $4,000, we were ok with that until the loan guy says we could only get $1,300 in concessions, there are still other questions and doubts i have in what i can and cant do. If anyone can help me, PLEASE GIVE ME ADVICE. I need someone else’s opinion on what can and can’t be done on an investment property.

 
3 Comments

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  1. Expert Realtor

    March 27, 2010 at 7:05 am

    1. NEVER use a Loan Officer that has “close ties” with the Realtor…this dramatically increases the chance for fraud and conflict of interest…never, ever, ever.

    You can only get up to 6% concession in the form of closing costs. $4,000 vastly exceeds that limit and if your closing costs are anywhere near $4,000 for a $65K house, I can tell you now that you are already getting ripped off from the LO b/c that is highway robbery….as in DOUBLE what you are most likely supposed to pay.

    The best advice I can give you is seek out ANOTHER LO…one that is not affiliated with your Realtor.

    I also have a feeling that both are trying to scam you.

     

  2. glenn

    March 27, 2010 at 7:52 am

    The rules and restrictions are changing moment by moment especially on investment property. What they are saying sounds right.

    Have you talked about getting your father-in-law to co-sign instead of being the only buyer?

    A good loan officer would go over all your alternatives because they don’t get paid unless they get you a loan.

     

  3. I Buy And Sell Houses

    March 27, 2010 at 8:38 am

    Ask your Realtor.

    There are plenty of ways to “swing the deal.” If the seller’s willing to take $61,000 ($65,000 minus $4,000) and all you can receive in concessions is 2%, then ask the seller to drop his price to around $62,300. Then, with 2% in concessions, the seller still receives his $61,000. And you’re buying the house for less.

    However, ask your Realtor for a CMA (competitive market analysis). Make sure you’re not overpaying.

    I’m not sure what other questions or doubts you have. But start with your Realtor. Ask direct questions, and don’t stop asking until you get answers that you understand and make sense to you.

    Also, make sure your and your husband have a clear written agreement with your father-in-law about everyone’s responsibilities now and into the future. Do you have a right to buy the property from him? What happens if you want to move? What happens if you don’t pay the mortgage (which technically will be rent, since the loan will be in his name)? There are a lot of things that should be agreed upon up front.

    Hope that helps.