Repairs before closing?

[Red]

I would personally advise my clients against making repairs to a property before they own it. Too many things can go wrong before the escrow closes & you've just improved a property you don't own. I wouldn't advise my clients to do it & I would not do it myself outside of an agreement for compensation should the home not close. And even then, good luck collecting on something like that.

 

[Runum]

Why not put your offer in pending foundation repair and certification. Of course you would agree to pay for the foundation improvement in the higher purchase price dollar for dollar.

 

[SteveO]

Ditto what everyone else said. The safest way is for you to find a lender that will allow the money for repairs to be set aside or held by an independent escrow company. Once closed, the lender would need to sign off on the dispersal of funds for payment on the repairs.

 

[DreamPursuit]

You could, but like Red said it's a big risk. We have had a couple clients that insisted on doing repairs before closing, only for the whole thing to come crashing down and be out be out of their money. I wouldn't risk it.

 

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[SteveO]

You are talking to conservative lenders. Phone calls my dear, phone calls....

Find some loan brokers. Many will say no, all you need is one.

 

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[AroundTheWorld]

... if only it were an investment property... grrrrrrrrrrrrrrrr

Then purchase it as an investment property.... and move into it after 6 months or a year (and after the re-fi)

 

[DeletedUser2]

tell the kids, and husband to chill while you get it done. and then focus on getting it done. asking mom questions will not get it done any faster.


pick 1 road.
go down it.
buy it as investment,
after it closes, and you make repairs, move in, and start the refi process.
use hard money and get the deal done


what ever you decide to do. PICK 1 path and solve the problems for THAT path. not the other 10 that come up around other paths. or you will run out of time.
Z

 

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[AroundTheWorld]

I love real estate. That Is All.

 

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[Red]

Buy the home with seller financing.

There is no seller financing available in a scenario like this.

but what are the chances of not closing with a locked in contract from a gov agency?

It has little to do with the seller not performing & more to do with unforeseen circumstance preventing closing -ie: what if it burns down? Tornado? Flood? All very unlikely, but all reasons that the escrow would come to a grinding halt. And every single scenario has happened (and waaaay more than I could every possibly list here).

Also make sure you know what govt agency actually owns the home. If it's HUD, you may be restricted in how it can be used for up to 3 years after the date of closing (ie: Good Neighbor Next Door program). Just make sure you read all the fine print that comes with the bank rider (and there WILL be a bank rider) & make sure you can fulfill the terms, as they DO check up on the homes & their usage.

The worst thing you can do is set yourself on ONE property. There will be other options, there are always other options, there is always other opportunity. When you view something as the one & only, you start compromising your normally logical decision making skills. By all means, make sure you explore all financing options available to you, as that can always come in handy, just don't set all your hopes/dreams/expectations/aspirations on one single home, there are ALWAYS other homes.

 

[Carny]

it is a manufactured home (essentially a double wide trailer)

They can be a cheap alternative, but keep in mind they go down in value and are generally a bad investment.

 

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[CashFlowDepot]

Sucks that it is bank owned. that really limits your options and it is why I do not buy bank owned houses.

check in to the FHA 203K loans.
http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/203k/203kabou

With the new Dodd-Frank rules, you will not find a private lender/hard money lender who will put up the money for an owner occupied houses. It is WAY toooo risky for them.

 

[SteveO]

I did talk to my sister about her experiences. She said that there are companies that specialize in manufactured home financing. A google search on "manufactured home financing" turned up some places. I did not go to any of the links.

She did say that getting the home "permanently affixed" will help with the value and the financing. That is up to local codes. Have you checked the codes in the area? Is that why you need to do the foundation work? She seemed to think that properties outside of the cities have less codes to deal with and may have an easier time.

If you haven't done so already, find out if the place is permanently affixed or whether it can be.

Keep calling lenders. Time is running low....

 

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[SteveO]

That is "Negotiating 101". You must be prepared to walk. They can follow you if they want.

 

[CarrieW]

So we have just gotten a bid accepted! It's a hud foreclosure. It needs work and we still have to get inspections and all but I LOVE IT! Wish us luck the rest of the purchase goes smoothly! Some pics.

 

[CarrieW]

I want to frame it lol.

 

[DeletedUser2]

ps....
http://www.privatemoneyexchange.com/

 

[SteveO]

Carrie. You are overthinking and overstressing this whole deal. Just keep calling. Find the objections and figure out a fix for each one. But, keep calling.

The type of lender you should be looking for will not care if this is owner occupied or not. They will just care that they will get their money back and make a profit. There are lenders out there that will loan on a manufactured home. You just need to find them.

 

[Carny]

3-12k (depending on what is under it, it could be as easy as replacing the vinyl skirting with a masonry wall... or as complex as starting from sratch)

I'm confused as to what the problems are. It has skirting and a foundation? Can you post a pic of it (or one like it)? "Skirting" and "manufactured" make me think of a mobile. Is it?

If it does have foundation problems being only 6 years old I would want to know exactly why. If someone skimps on the most important part of a house then you can bet that they cut every other corner they could.

 

[SteveO]

You are actually making this sound easier all the time. There is no foundation problem? Perhaps it is just set on jacks or blocks? You don't need an FHA loan. I doubt that you will need to even "fix" this. My dad has a manufactured house that is on stands. My sister has two of them. All of them have house loans on them. I think they paid a percentage point higher than the going rate but they definitely have loans on them. I will ask them tomorrow where they found the loans. I recall them needing to shop a bit.

You could also try ALL of the local banks.

 

[CarrieW]

ok... so I spent all morning getting turned down by brokers... only to find a wonderful guy named David, who couldn't personally help me, but gave me the most awesome lead!

I knew about 203k loans... it usually has eligibility on the sites. it wasn't there so I didn't think about it. as far as I knew they were only for stick builts...

well there are not very many lenders in the country that do them on manufactured homes... I was given the keys to the kingdom! He put me in touch with a 203k broker who does manufactured!!!

that 203k broker is speaking to his underwriter at the lender right now to make sure the foundation is allowed to be repaired under the 203k I am waiting for the response

I will post back soon!

 

[CarrieW]

just received a surprise return phone call from someone... they may have a financing option for me... I will know either this evening or tomorrow morning... LOL I am not holding my breath... but he came very highly recommended to me from a friend in the business.

He didn't seem phased by any of the story, said he would be very surprised if he cant get it done... even if he cant go thru conventional means he said he has other options available to him

we will see

 

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[SteveO]

Hey steve since you know a bit about this n saw the pictures. That metal strap that is in front of the one set of blocks going into the ground is the hurricane strap right? I only went just in under. I wasn't crawling all over under there cause eww lol

I don't know anything about hurricane straps. We live in AZ. The only protection we need here is something to keep us from melting and spontaneously combusting.

 

[CarrieW]

GAHHH!!!!!!!!!!!! LOL!!! they have accepted a full price cash offer all I have to say is that the Freddie mac people aren't the only ones who are going to be watching for the proper owner occupant usage on this house... I already stalk the sales and tax records on a daily basis LOL and its not too far from where we live so its on... LOL

so we are meeting the realtor at 5pm to put in a bid on the white house... I will let you know whats going on... I will let you know also what the finance guy says for shits and giggles.... and I got my prequel letter from the bank for the refi in 6 months LOL

only me I swear LOL

 

[SteveO]

Way to hang in there on this one. It looks like you learned a lot from the process.

 

[DreamPursuit]

LOL fair enough I am 90% certain that is the hurricane straps... I cant imagine what else it could possibly be...

anyone else know?

Hey Carrie, yes those are the tie-downs, to prevent the structure from flying away in a hurricane.

That sucks that they accepted another offer, but you're now much more knowledgeable about the whole process. Hang in there!

 

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[CarrieW]

just got word... the white house people countered our offer. we countered back. will know in a few days

 

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[Steve37]

@CarrieW
What are the reasons why some get a house under contract every month whereas some others can't seem to get anything under contract for months?

Relationships and track record are the biggest reasons. Many of the volume guys have already seen houses and have offers teed up before the houses even hit the mls. If an agent has already done some volume with one buyer vs an unknown quantity you know which way that will go. In a perfect world the listing agent will always represent the best interest of the seller, but that's not always reality.

 

[CarrieW]

Ok... Smh here... I had a hiccup in the mtg (AGAIN GAHH)

I believe it is straightened out. We are on track now I hope.

I really want this deal to go through.

Please send good vibes that everything goes well!

We haven't even begun inspections yet and I know there's a bit wrong with it. We are expecting certain things. I just hope there isn't something huge that we missed...

Just to clarify this house is for us not to flip. We are going to redo a lot but we aren't planning on selling.
Rei is for after We purchase for ourselves. its been over 9 yrs since we owned our own house

 

[DreamPursuit]

It should be after the repairs are made, if he's already been out there before.

 

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[CarrieW]

Max deductible is 5% ! WOOT!!! It looks like we're good! June 26th!