Posted on: 16th Sep, 2010 05:40 pm
thanks in advance to anyone who has the patience to read this all, and even more so to anyone with advice or insight.
i may be giving too much information to sift through, but i think that’s better than not giving enough.
we have been negotiating a short sale on 10 units since feb 2010. ocwen is the holder of the current mortgages on the properties. the setup of the units is a bit unorthodox, but no so much so that it should be prohibitive to financing, which is where we’re hitting a brick wall.
here is the layout, south to north, all on the same side of the street, all parcels adjacent to each other:
a) vacant parcel for parking
b) vacant parcel for parking, with driveway.
c) parcel containing 2 duplexes
d) parcel containing 2 duplexes
e) parcel containing one duplex
a and b are a separate cash deal, 15,000 (overpriced, but they become worth it when you do the math on the rest of the deal).
c is $39,000, four units fully occupied, gross rent $1975/mo, all tenants on year leases. all units and exterior in good condition, mostly updated. needs minor cosmetics. we need to finance this property or we will be spending all our cash reserves. after 8 months of waiting for an answer from ocwen, we are currently under contract with this property, and scheduled to close sep 22. our problem is that our lender uses fannie/freddie guidelines, which have recently been changed to exclude financing on parcels with more than one residential property on them. we were all pre-approved, ready to go, and this came down the pike. this is the crux of our problem. we have checked credit unions, other banks, looked into splitting up the parcel, you name it. everybody uses fan/fred guidelines. this seems crazy, because in the midwest, there are loads of properties like this, all recently rendered unsellable by this new edict from the man.
d is 31,000, four units, three units occupied, current gross rent $1300/mo. occupied units and exteriors in good condition, unoccupied unit needs last coat of mud, sanding, painting, floors sanded, kitchen and bath installed. i do most of this work myself. this unit will rent for 550 once finished, bringing gross rent to 1850. bank accepted our offer on this several months ago, but we had to pass, because without c and the parking parcels, it would not be workable. we have resubmitted our offer.
e is 10,000, 2 units, fully occupied, gross rent $1000/mo. have not been inside this property. the numbers tell the story. it is a recent addition to the rest of the deal.
our ducks are in a row, credit excellent, all the numbers work. we’re hitting a wall because fannie/freddie changed the rules. we have about 100,000 in reserves, and do not want to tap all of that for this deal. the original plan was to purchase a b d and e with cash, and refinance them later. we were going to use conventional financing, with 25% down, for c. this would give us 10 units, of which 9 are rented, for 95,000. fabulous deal.
anybody have any ideas? we’re nearing the end on this one.
thanks again.
will
i may be giving too much information to sift through, but i think that’s better than not giving enough.
we have been negotiating a short sale on 10 units since feb 2010. ocwen is the holder of the current mortgages on the properties. the setup of the units is a bit unorthodox, but no so much so that it should be prohibitive to financing, which is where we’re hitting a brick wall.
here is the layout, south to north, all on the same side of the street, all parcels adjacent to each other:
a) vacant parcel for parking
b) vacant parcel for parking, with driveway.
c) parcel containing 2 duplexes
d) parcel containing 2 duplexes
e) parcel containing one duplex
a and b are a separate cash deal, 15,000 (overpriced, but they become worth it when you do the math on the rest of the deal).
c is $39,000, four units fully occupied, gross rent $1975/mo, all tenants on year leases. all units and exterior in good condition, mostly updated. needs minor cosmetics. we need to finance this property or we will be spending all our cash reserves. after 8 months of waiting for an answer from ocwen, we are currently under contract with this property, and scheduled to close sep 22. our problem is that our lender uses fannie/freddie guidelines, which have recently been changed to exclude financing on parcels with more than one residential property on them. we were all pre-approved, ready to go, and this came down the pike. this is the crux of our problem. we have checked credit unions, other banks, looked into splitting up the parcel, you name it. everybody uses fan/fred guidelines. this seems crazy, because in the midwest, there are loads of properties like this, all recently rendered unsellable by this new edict from the man.
d is 31,000, four units, three units occupied, current gross rent $1300/mo. occupied units and exteriors in good condition, unoccupied unit needs last coat of mud, sanding, painting, floors sanded, kitchen and bath installed. i do most of this work myself. this unit will rent for 550 once finished, bringing gross rent to 1850. bank accepted our offer on this several months ago, but we had to pass, because without c and the parking parcels, it would not be workable. we have resubmitted our offer.
e is 10,000, 2 units, fully occupied, gross rent $1000/mo. have not been inside this property. the numbers tell the story. it is a recent addition to the rest of the deal.
our ducks are in a row, credit excellent, all the numbers work. we’re hitting a wall because fannie/freddie changed the rules. we have about 100,000 in reserves, and do not want to tap all of that for this deal. the original plan was to purchase a b d and e with cash, and refinance them later. we were going to use conventional financing, with 25% down, for c. this would give us 10 units, of which 9 are rented, for 95,000. fabulous deal.
anybody have any ideas? we’re nearing the end on this one.
thanks again.
will
Hi Dorkface!
Welcome to forums!
It is true that all the lenders use the Fannie/Freddie guidelines and no one will be ready to lend you money for that parcel of the property if you don't meet their requirements. There's hardly anything that you can do in this regard. If you've cash reserves, then you can pay cash in order to purchase the property.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
It is true that all the lenders use the Fannie/Freddie guidelines and no one will be ready to lend you money for that parcel of the property if you don't meet their requirements. There's hardly anything that you can do in this regard. If you've cash reserves, then you can pay cash in order to purchase the property.
Feel free to ask if you've further queries.
Sussane