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Jackie and Cashflow Depot Members:
I was listing to Jacks Option Class ( A must for all members, a steal at the price), and I was intreaged by the technique of the new owner of the property selling an option on their newley aquired property at closing to generate the down payment. I could do some deals if I could make this work. Talked to a mortgage broker to see if this would fly on an owner occupied purchase. She said that the underwriter would have to show 3 months seasoning of ownership of the option to make this work.
Has anyone used this technicque or any comments on how to insitute this?
Thanks
Don Wede
Don
I have used this technique but it has been a few years. I did not have to wait 2-3 months.
I doubt seriously that the mortgage broker or the underwriter knows what an option is or how it works so they are not the best people to ask.
It’s no different that you buying their car, furniture, jewlery, etc…. you can buy anything from the buyer to help them come up with the down payment. Then the buyer can show the “bill of sale” for the option or item which allowed them to come up with the money for the down payment. The bill of sale can state that the funds will be paid AT CLOSING because you sure don’t want to buy an option from someone who does not show up at closing.
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