9-1-23 – Buy all cash or with Bridge Financing?

It has been a crazy week so far, and it has nothing to do with opening a bunch of escrows. Meeting, planning, and putting new products on the shelf is my job, and today, we have a pretty big announcement. We have heard about these companies purchasing properties in cash and then selling them to the end-use buyer with a 2% additional charge. We are doing the same thing, and I wanted to give you a couple of options, so here is how the deal works:

Buyers want to buy a house for 1.2 Mil and have 5%-99% down, and we can close in 10-12 days. The listing agent says she has an all-cash buyer, and the seller wants all cash! UGH! Bidding goes up to 1.3, and the buyer agrees to pay 1.3 but can’t pay cash, so they go to us to buy the house for cash, and we do that. We close at 1.3, having them fully approved, and they purchase the home back from us at $1,326,000. Plus they will pay both halves of the escrow fees plus the escrow fees on the purchase we just made. We will open an Escrow for them to purchase the house with a 5% NON- Refundable deposit if they don’t close Escrow on the house.

Now, the math:

So let’s say Escrow is 15K - 25K (3 sides total) plus or minus, and they pay the $26,000.00 to pay cash, then they are out $40K – $50K +/-.

Another option is to set it up with a Bridge Loan and put this terminology into the offer and see if that will work like cash:

Augusta Financial is a privately owned Mortgage Company that does traditional and non-traditional loans. This loan is NOT subject to further qualifications such as income, assets, credit, etc. We are closing this with a Non-Traditional Bridge Loan, and the buyer will refinance after we close Escrow. Augusta Financial does not need further approval to complete this purchase loan. This loan can fund in as little as seven business days from the time Augusta Financial receives a full package.

Getting a Bridge Purchase loan will allow the buyer to pay fees on the loan amount instead of the purchase price. They will only have one additional refinance escrow fee (About $4000.00), and they will do that immediately. Assuming this is a 20% down payment, the costs would be approximately $30,000.00, including the refinance, assuming they get a no-point loan. This savings is $10,000.00 to $20,000.00 or more. Now the question is, can you get an agent to accept the Bridge offer with the above verbiage, or do we have to buy the house in cash? Either way, we are ready to go and help your buyers!

Interest rates have improved five days in a row and nine out of the past ten days. We are still at high levels, but Government loans have a 6 in front of them, and so do some conventional loans! Stay positive and keep grinding.

• 12-day escrows if your buyer is pre-approved - Conventional / FHA / Jumbo / Bridge
• We do loans in all states, so call me with anything you need.  
• Government Loans (FHA / VA) are in the low to mid 6’s.
• Conventional Loans up to $726,200.00 are in the low to mid 6’s and low 7’s.
• High Balance Loans $726,201.00-$ 1,089,300.00 are in the 6’s and 7’s
• Jumbo loans above $1,089,300 are in the 6’s and 7’s
• Bank statement loans - They are available with 10% down again! 7’s and 8’s + depending on down and credit score.
• No income qualifier – 40% down with reserves! In the 6’s!
• 0 down loans are in the mid to high 6’s – 660 credit score min right now, up to $740,000.00.
• Private Money lenders - hard Money Loans – 35% down!
• No Ratio Loans 30% down
• Debt Service Coverage loans with as little as 25% down
• Bridge Loans - are typically 7.99% with limited fees – But they get you where you need to go!
• 0 down California Dream for all Equity Share – Postponed until 2024!
• 3/2/1 Buydowns 2/1 Buydowns and 1/0 Buydowns are available at great start rates!

Interest rates are subject to change without notice! Above are LA County Loan Limits.

I am around all weekend if you have any questions or if someone is interested in buying a property! My cell is 661-714-6258, and my office line is 661-260-2970 ext. 2222. Please text me at 661-714-6258 or email me at Mike@AugustaFinancial.com. Have a great day and a better tomorrow! Please call me when you have a client that needs to borrow!