Double Escrow, how does this work? What lenders do this in Las Vegas, NV?

[hawai_pinay]

Aloha All!

I was approached on doing a Double Escrow here in Las Vegas Nevada.

One investor is going to buy the property at $800,000 and that very same day, another investor is going to buy that same property for $1.5m. The contract was already drawn up to do a transaction like this, the realtor involved had a lender do this, but it feel out of escrow somehow?

Any lender that can do this, please let me know. And how it actually is sopose to work out? What is the guidelines?

Mahalo
Wailani Aquino
JP Mortgage
WailaniA@jpmgOnline.com

[hawai_pinay]

The person buying the home had a job transfer and because he knew he could afford this house, he is in the purchase of $800,000. Now, the job transfer didnt go so well money wise, so he is stuck with a big loan and house.

Now the house has been appraised 3 times for $1.5m. And the realtor involved found an investor that is willing to buy the house from this guy for the appraised value of $1.5m. This is sopose to close the day after the 1st guy buys the house, end of this month.

Anyone follow me so far.

Can any Lender do this transaction because, seasoning is one issue and it looks like a flip, but its not. Its helping the 1st buyer get out of big debt somewhat. And found one that is willing to purchase it for that price, because the appraise value is for the sale of the home.

Please respond someone....1st loan, not a problem. Just more of the 2nd loan.

[GeorgeWBooth]

Wailani,

Seems somewhat strange. Have you considered telling your borrower to approach the seller about backing out of the purchase agreement and substituting with the new borrower? I think the drastic price change would entice the seller to take the second offer and release the first buyer.

You are going to have a hard time getting that second done due to the seasoning I would think.

[hawai_pinay]

Thank you GeorgeWBooth for the response.

But after clarifying the whole transaction, its techinically legal to complete a transaction such as this.

Involved is Builder, 1st Buyer, private Buyer, Realtor and Investor.

Builder and 1st Buyer, that is a no problem transaction for me. But this 1st Buyer does not want the house no more. All they want to do is sell it and not be stuck with the big payment. That is why the agreement is to find someone ASAP to purchase it, almost Brand Spanking new.

Realtor found an Investor (you probably hear those, we will buy your home even if its in foreclosure or some kind of ad like that?) who found this Private Buyer to buy this property for the actual appraised value of $1.5m.

According to Title, this is legal. Contracts are all sign correctly to proceed.

Please contact me if you have any further questions.

Any lenders that understand this senario, please Contact me ASAP!

Mahalo
Wailani Aquino
WailaniA@jpmgOnline.com
702-835-5900

[Erik]

Wailani,

No offense or disrespect intended, but if one looks at this from a lender's point of view it doesn't seem to make much sense to take a deal like this (in my opinion). They would be going into it knowing that they would not be making any money on the transaction, unless "x" points were paid to the lender at closing, which probably is not the case.

The lender won't be receiving any interest payments on this deal so why would they want to go through the time and effort of providing the money for it?

You might have to get some hard money where "x" points are paid at closing or figure out some other sort of situation because I doubt any regular lender would touch this.

[Greg]

The first loan will do it and does not have to know about the 2nd loan/investor.

All you need is a lender to do 1.5 that has no seasoning. But give more details about the 2nd investor.. Fico, Doc Type.

What kind of money will he lose if he backs out? He will pay capital gains. Realtor needs to let him out and sign up the 2nd guy.

Now I know you want to close 800k then 1.5k but integrity has to come into play. I he aware of the possible tax issues?

[GeorgeWBooth]

Well put Greg!

Wailani, I certainly see the tempting position you are in with this particular transaction. The thought of losing money by doing the right thing is sometimes a hard decision if we are wanting. I will tell you of a deal I have pending right now. My company does alot of hard money deals worth MANY millions of dollars. I was called yesterday with a deal that we most certainly could do, but I declined the deal and advised the borrower how to handle his title insurance agent. He simply needed to ask for a particular type of exeption to his policy pending dispersal of a tax lien payoff.

Yes, I could have done the deal and granted the exeption myself and made enough in this one deal that would count for 3-4 months of SFR deals. The point is I couldn't do it in good faith when i knew his problem was minute.

After advising this would be client he thanked me and then told me he would make sure all of his title work in the future would be sent to me and all his investor friends went to me as well. That is worth ten times what I would have made on this policy.

btw, Greg. Nice to see someone local on the board here. I'm in Westlake. Would love to have coffee with you sometime.

George



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[Greg]

Just check all the facts... He is making a profit so it might not be such a bad thing.. Sorry for my 1 sided post.

Oh George.. Probably will but the title companies always look at the production board and try so hard to get me on it almost is upsetting.

It would be good to network though. Maybe after a while it might go into something else. I get tired of the gifts and offers for drinks.... Coffee is a first though. That really does hit home with me. Besides nights are for my family. I can do the mornings.

I currently use Netwide Title in Massilon Ohio because they are honest genuine people who care and re-act to issues the way a retail store would. Customer always right attitude and low fees. Closings anywhere and anytime..

What states do you do?

[GLOAT]

I'm trying to figure out here how almost doubling your cash in literally minutes or hours utilizing real estate financing without any changes to the property other than vested interest is not a "flip". There's black and white-then there's grey. There's wanting to get through rough times w/o scars-then there's two friends(or more) and a stranger. Know your clients-know your clients lie-know money, or the promise, hope, or expectation of it can persuade others to join the lie. Be casreful, safe, and do your homework. Pick a career or have a good run.

[GeorgeWBooth]

Greg,

I feel your pain, I carried a LO license for almost three years and was hassled by title companies every week. Title Insurance is a family tradition for me going back three generations. Needless to say, my ethics are unwaivering. Too many title companies are taking the shortcuts and think RESPA is a shortened medical term.
I would love to Network with you some time. When I worked for Pacific Guarantee Mortgage here in Westlake, my business was all referral. If you are not already a member, I would advise you to look into the North Coast Builder's Industry Assoc. lots of builders to work with.

I can appreciate your loyalty to your title company, it takes alot of proving yourself to be able to make an LO happy so I wouldn't dream of trying to solicit that business from you, but, if there is anything out of state you may need from time to time, I would love to assist you when that time comes. A complete list of our coverage can be found at www.ctsinsurance.com I think when the time comes you will be pleasantly suprised.

George