Author Topic: Offer "Double" the Asking Price to get an Additional House  (Read 2665 times)

Crazydude

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Offer "Double" the Asking Price to get an Additional House
« on: April 11, 2016, 08:09:27 PM »
So this is something banks (and perhaps the law) wouldn't like. I'll break this into two parts, my situation and my question:

1. Situation - I'm looking for a home to buy on a VA loan. I have already purchased a house in the past using the VA loan. And there's this weird unexpected outcome of the way the law was written: if you currently have an "active" VA loan and want to use it again to buy another property, the MINIMUM loan amount required is $144,000. So I cannot purchase anything less.

2. What if I found an owner with multiple properties, and I offer to buy TWO for a total price of $144,000, the catch being I actually only buy ONE, in which I give him 144k for, and the other one is basically given to me. In other words, there's only one mortgage of 144k.

Is this even legal? Has anyone done this with a conventional mortgage?

ShoulderThingThatGoesUp

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Re: Offer "Double" the Asking Price to get an Additional House
« Reply #1 on: April 12, 2016, 04:59:43 AM »
Wouldn't one of the properties you're buying have to appraise at greater than the loan amount, since the lien would just be against that property?

Fishindude

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Re: Offer "Double" the Asking Price to get an Additional House
« Reply #2 on: April 12, 2016, 05:03:12 AM »
In all likelihood this is against the terms of the VA loan agreement and sounds like a recipe for problems.
Why don't you just get a conventional loan?

Crazydude

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Re: Offer "Double" the Asking Price to get an Additional House
« Reply #3 on: April 12, 2016, 05:36:39 AM »
Yes I'm almost certain the bank will not loan more than the value of the home. It was just a thought. By using a VA loan instead of conventional, I can put $0 down and not have to get mortgage insurance.

Fishindude

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Re: Offer "Double" the Asking Price to get an Additional House
« Reply #4 on: April 12, 2016, 07:39:23 AM »
Zero down?
If you don't have a down payment, you probably shouldn't consider buying in the first place, rent.

Jack

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Re: Offer "Double" the Asking Price to get an Additional House
« Reply #5 on: April 12, 2016, 07:57:46 AM »
Zero down?
If you don't have a down payment, you probably shouldn't consider buying in the first place, rent.

That doesn't hold true in all circumstances. I won't re-hash my experience (suffice it to say, in 2009 it was totally worth not waiting to save for a down payment), but this thread sounds more like Crazydude is trying to buy investment property. In that case, being able to avoid a down payment this time directly translates into being able to use that cash for a down payment on the next house instead, increasing his cash-on-cash return.

Crazydude

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Re: Offer "Double" the Asking Price to get an Additional House
« Reply #6 on: April 12, 2016, 08:30:36 AM »
Zero down?
If you don't have a down payment, you probably shouldn't consider buying in the first place, rent.

That doesn't hold true in all circumstances. I won't re-hash my experience (suffice it to say, in 2009 it was totally worth not waiting to save for a down payment), but this thread sounds more like Crazydude is trying to buy investment property. In that case, being able to avoid a down payment this time directly translates into being able to use that cash for a down payment on the next house instead, increasing his cash-on-cash return.

Exactly. I own a couple investment properties already, and plan on purchasing one to live in with the VA loan (a duplex). I could afford the down payment, just don't want to.

forummm

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Re: Offer "Double" the Asking Price to get an Additional House
« Reply #7 on: April 12, 2016, 09:27:25 AM »
If the duplex idea doesn't cost $144k, perhaps a triplex or quadriplex would. Although, the VA loan program may not allow that.

Crazydude

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Re: Offer "Double" the Asking Price to get an Additional House
« Reply #8 on: April 12, 2016, 09:53:43 AM »
The VA does allow at least up to 4 unit (maybe more). They are however rare in my area.