Expert: Dick Dennis - 12/10/2007

Question
Hello,
I am looking to purchase a house that has been sitting 80% finished for about 6 - 8 months.  The realtor that had been trying to sell it called me and told me that the house is now owned by a bank and they are looking to sell it.  I would like to get a great deal on this house and then finish the house myself or have a GC do it, but I don't quite know the process or the risks of purchasing a house from a bank.  I also wondered if I am able to take a loan out for more than what the house will actually cost me to purchase and finish as long as there is sizeable equity in it compared to the market value.  I would like to use this extra equity money to make the down payment if possible.  Can you help me with this?  Thanks

Answer
First, you must have good FICO numbers. Then you must actually own the property after you have purchased the house at a good enough price that you know is below the going market. You will then go out and create a comparative market analysis so you can show the bank from which you want to borrow the money to fix up the house that it is indeed worth much more when the fixup is finished. If you want to make sure you'll get what you want, get an investor to put up the down payment, give him a fair return on his investment, then you won't have to worry about the down payment. Besides, you'll show the lender from which you bought the property, that you are sincere and liquid. You want to be in a position of they needing to sell more than you needing to buy. I wish you well.

Dick Dennis      dixiedee13@aol.com