[Vivian Williams]

Vivian Williams

I recall one of our members who was able to getting buyers their downpayment by buying options on their new homes in return for some of the appreciation. does this still work in this lending market?

[Jackie Lange]

Jackie Lange

Depends on where you live. In CA, NY, NJ or IL probably not. IN any other state, yes, it will probably work. Talk to an experienced and creative mortgage broker to find out

[DON WEDE]

DON WEDE

Jackie,
Why do you say probably not in Illinois?
Don Wede

[Vivian Williams]

Vivian Williams

don, i believe that, you were the individual who was doing options for downpayments, how did that work out? were you able to get that through underwriting?

[DON WEDE]

DON WEDE

I had never put one together. I was wondering why Jackie was excluding Illinois. I know of no laws or procedures that would not allow it.
Don Wede

[Jackie Lange]

Jackie Lange

I read someplace that those are the states where it is harder to get a retail buyer approved for financing than any other state.

When you throw in a “creative” strategy like an option for the down payment, it would make it even harder.

In Texas,’ I’ve done the option for a down payment but it was before the big housing crisis. It think it would be much harder to pull it off now with tightened mortgage regulations.

[Jackie Lange]

Jackie Lange

The easiest financing to get now is USDA loans.

Find out which areas near you are covered under USDA – then go get some deals there if you insist in selling to retail buyers. You will have to jump through a lot of hoops to sell to a buyer who is getting financing. It will be stressful and very time consuming.

It is much better to buy with seller financing then sell with seller financing. Or buy subject to the mortgage then rent out/sell with seller financing. Or do master leases. Or do wholesale deals.

Any kind of deal that does not require selling to a retail buyer will be MUCH EASIER.