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financing for homes bought at auction?

doing my research because i heard this is a cheaper way to go. i'd also be looking for a loan that allows for repair/renovation costs to be included. by kensuarez784623377 from Boulder, Colorado. Dec 18th 2014 Reply


James Crowder (JamesCrowder)
#59 ranked lender in Colorado - 30 contributions

Ken,There are programs available that will allow you to finance both the acquisition of the property and the renovation. Fha offers the 203K program and Fannie Mae offers its "Homestyle Renovation Loan". Freddie Mac offers a similar program as well. They all require that you have detail plans, specifications an bids for the work to be done before the loan closes. This often makes it difficult to use the loan to purchase a property at auction using this type of loan because there would not be enough time to get all that together and get your loan approved.Some folks buy homes that have been foreclosed upon already and are owned either by FHA, Fannie Mae, Freddie Mac. In this case it is possible to buy the property with such a loan because the Agencies offer special programs to make that a possibility.Please call if you would like a consultation.Jim Crowder(303)817-3308 cell

Dec 18th 2014
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,659 contributions

There are no conforming loan products you can use to purchase a home at an auction.. typically, when a home is auctioned off, it must be paid for with 24 to 48 hours, the homes are sold as is, and in some cases, the title is not 100% guaranteed. And in most instances, you cannot even walk through the property before you purchase it.. This makes it impossible to put conforming loan products in place to buy one of these homes. This is why auctions homes are sold for cash sales only.. There are companies out there that will lend you money to purchase one of these homes, but you would need 30% or more as down payment.. and the loan would be for only 6 months to 12 months... If you have the funds, it might be a way to go.. you can purchase the home at auction, fix it up on your own dime, and once it's completed, you can do a cash out refinance and pull your funds back out. If you dont have the necessary funds to do this, then your only option would be to look at REO or bank owned properties.. with these properties, you can use both FHA's 203K or conventional's HomeStyle renovation loan to purchase and finance the necessary repairs into one new mortgage.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com

Dec 18th 2014
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Phil Dumouchel (PhilDu)
#1 ranked lender in South Carolina - 2,240 contributions

You'll have to do more research, it depends on the auction. I've financed a couple where the auction allowed the full payment to be made later, but that is not the norm and definitely not everywhere. Be careful that you look at all the options. I can help with purchase and renovation financing but typically it takes around 45 days to close, faster is definitely possible if all the "stars align".

Dec 18th 2014
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Linda Wintersteen (Linda123)
#63 ranked lender in Arizona - 1,256 contributions

I havea product that will allow you to get funding, but you need to have the end loan in place.. I have transactional funding, which gives you the power to purchase and the auction, wire the funds, but you need the take out loan in place. its basically a 24 hour turn around.. linda its not hard money.. ..

Dec 18th 2014
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Michael Patterson (MichaelPatterson)
#52 ranked lender in Washington - 73 contributions

Foreclosure Auction properties are not MLS Listed homes and require "cash on the barrel head" literally at the county courthouse steps in most jurisdictions. Traditional financing options require much more time to obtain the appraisal, title policy, underwriting loan approval, etc... which you don't have the ability to do for a fast moving foreclosure auction bidding process. You would need either private financing, or hard money financing lined up so you can prove your financial ability to purchase the property before you'll even be allowed to bid on them. Strategies for flips... or buy and holds as a rental... or even buying for your own personal use... all have different financing strategies involved. Some hard money lenders will allow for a construction budget to be financed, WITH the buyer having some skin in the game as well. No hard money lender wants to have 100% risk on the deal. If the strategy is to keep the property as a rental, then having the "take out financing" in place is mission critical even before agreeing to buy the home in the first place. All of these ideas make it abundantly clear that it's really important to talk to someone who knows these strategies and is willing to help you steer clear of the landmines that blow up most first time auction investors. I would recommend doing a lot of homework, and making sure you have a great handle on all of this. Have a good exit strategy... don't believe the first agent that tells you how high you will sell the property for after it is repaired... do your own comparable sale searches. Walk the neighborhoods and look at dozens of homes... have good asset reserves for any surprises that could come up along the way. IF you're buying listed properties? Totally different scenario. A 203k rehab loan or a HomeStyle Renovation loan would be something to look at.

Dec 22nd 2014
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