make contract with higher price than selling price to get more mortgage

make contract with higher price than selling price to get more mortgage

hi everybody!
hope all doing well and make good business!!Eye-wink

i want to buy family house to rent.
if i put the regular 20% down payment and rent...i can do it once and thats it...
my idea was to find a seller who willing to sign contract higher than the sale price (but no more than market value) in this way i can get mortgage for almost all sell peice.
for example:
asking price and real value - $600K
close the deal at - $500K
if the contract will be at $500K - i can get loan of $400K.
if in the contract will be sale price $600K > i could get loan for $480K.

my questions -
1. what kind of problems can be?
2. how i can do to really show that i pay to the seller all the amount that its in the contract (so he cant ask me the different in the future...)
3. from the seller side it can be a tax problem - how can i resolve it? (biside pay him the tax for the difference...)

i would like to hear if somebody did it before and how it worked out.
and any kind of thought and feedback!


What you want...

to do is illegal! If you don't have money to invest then look into wholesaling for awhile until you can finance a property for rental. Also, you could look at hard money lenders. You can always look for private lenders as well.

Press on...

I'm in the same boat as you.

I'm in the same boat as you. I tried wholesaling for 4mo. and cant work a single deal, though I tried very hard and put a lot of time and effort.

Now, I am looking into buy and hold, qualified for a loan, but dont have down payment for more than 1 house. I'm trying to put offers on houses sold by owners, (NO shortsales, no forclosures) Offers on my name, and assign it to my husband (Loan is in his name) so I will get some of the down payment out to pay for the next one. I just started to try this since last week and will let you know how it goes.

I'm also looking for other/ similar ideas to work around REO's. Comments and ideas welcome !

I'm guessing what you're looking for is...

A "no money down deal"! Am I right? If you have no experience, it can still be done, Dean tells you exactly how in both his books. Make sure you have read them both twice and understand them completely before attempting anything! Next, if you've never done a deal before, might I suggest a MUCH smaller target, like a $50,000 property, not a half million dollar one. You need to get your feet wet first, and with a $50k house, you can move it fast in any condition in any market cycle. A $500k house might be alot harder to do anything with right away, depending on its location (refer to Dean's books).

I think what you were trying to ask us were the following:
1) Can you borrow more than 100% of a property's SALE price, so that you get money back at closing? Of course you can! 75% of RE investors never would have been able to start or stay in business without a no money down deal that made them cash at closing.
2) Can you be dishonest or inaccurate on your paperwork to get this extra money? ABSOLUTELY NOT! It's called fraud, and you will be caught.
3) Can you borrow more than a home's ARV with only 1 lender involved? Not likely in this economy, especially for a 1st deal. Some investors can borrow a little bit more, but they have perfect credit and an obscene amount of verifiable income, so let's just say "no," even though some wealthy veterans can still pull it off.

Example Scenario: You find a house whose final ARV is $100,000. You agree to buy it from Seller for $65,000. Lock it up on contract for $65k, make it ready to sell or rent. You now secure financing through a bank, they do their own appraisal and says the house is worth $100k. You qualify for an 80% mortgage, so you can borrow up to $80k to buy it. Depending on your closing numbers and your lender, they might not let you walk away from closing with $15k of their money. If that happens, borrow as much as you can from your bank, and have the seller write you a 2nd mortgage for the rest (plus a little extra for you). If the bank asks about it, tell them you need money for repairs, and have photos and estimates to prove it to them. If the bank still won't let you go this route, you're either trying to get too much money at closing (so lower the amount), or you have the wrong bank (get a different mortgage!). Hope this helped...


Paul: "I must not fear. Fear is the mind-killer. Fear is the little-death that brings total obliteration. I will face my fear. I will permit it to pass over me and through me. And when my fear is gone I will turn and face fear's path, and only I will remain."

Duke Leto: "I'll miss the sea, but a person needs new experiences. They jar something deep inside, allowing him to grow. Without change something sleeps inside us, and seldom awakens. The sleeper must awaken." - "Dune."


have already been burn once. They're going over P&S agreement contracts with a fine tooth comb now. In some areas (with declining real estate market), the Bank and the Buyer (which their lender is requiring them to pay for also), are both paying for separate appraisals. The lender is going to go by the price that's shown on the contract and make their determination from the value (that appraiser gives) and condition of the home. With half a million dollar properties, the primary and junior lien holders are not going to let you nor lend you 100+% even if you had 900 FICO score. So don't get greedy, start with homes under the median price (value) homes of your area, to generate a liquid cash flow.


In the name of Allah, the Beneficent,
the Merciful.
22.He is Allah besides Whom there is no God: The Knower of the unseen and the seen; He is the Beneficent, the Merciful.
23. He is Allah besides Whom there is no God: the King, the Holy, the Author of Peace,the Granter of Security, Guardian over all, the Mighty, the Supreme, the Possessor of greatness. Glory be to Allah from that which they set up (with Him)!
24. He is Allah: the Creator, the Maker, the Fashioner: His are the most beautiful names. Whatever is in the heavens and the earth declares His glory: and He is the Mighty, the Wise.