Buyer closes on distressed foreclosure in less than three weeks
Mortgage lender: James Forte
Property type: Single-family home in Bethel
Purchase price: $ 155,000 Borrowing amount: $ 172,500
Loan type: Fixed 1-year at 7.99 percent
Background: The borrower was a retired general contractor who had had a lot of success flipping houses back in the day when money was easily available through no income verification.
But now, with little income to report on tax returns and not a huge amount of savings, she had no way of buying a house for cash and putting money into selling it.
All seemed lost for her until her son-in-law referred her to Forte. People who want to buy, fix and flip foreclosure houses typically have two options: cash or hard money.
Now there is a third option, which is where Forte comes into play. It’s a special no income verification line of credit made specifically for flipping houses. It allows you to close in 10 days to two weeks on a foreclosure or distressed property without the exorbitant costs of hard money. Not only does this option give you purchase money, but it gives you renovation money as well.
Forte got her set up and approved for the line in advance so she would be ready to go when a property came up. Sure enough, the first property came up and Forte had them closed within three weeks from the day the bank accepted their offer, which was also in the middle of a very busy holiday season.
The property was distressed. It needed $33,000 worth of work, and the buyers knew they could buy it for $ 155,000, put $33,000 into it, and sell it for $250,000 plus, based on comparable sales. The borrowers closed, putting only 10 percent of their own money into the deal for both the purchase price and total renovation costs.
The great part about this line for these clients is that they can buy five or six properties at a time and really make money, as opposed to using their own capital to flip one house and have that stress on their shoulders.
It was a very happy ending as the buyer was able to take advantage of this diamond in the rough. The buyer can now literally go back to making a few hundred thousand per year flipping houses with this amazing line of credit tool where she had no other viable options before.