Just re-read this blog and wanted to see if it is still not illegal to do simultaneous closings here in Indiana where the end buyer is paying all cash (no lender’s involved).

I just sent a comment to Dustin but I should’ve included your name in my comment.

I apologize. I just hope we can still contact Dustin to help answer my question.

Thanks,

Peter Lin

I read your April 12, 2009 email about the simultaneously closing.

Can you tell me the title company’s name? I’m looking for a title company in Ohio that can do this but so far has no luck.

I closed 3 reo deals so far. But I used transactional funding to close A-B deal and still had to do another B-C closing (cash buyer C paid for the B-C closing). I have to pay A-B closing cost plus $2500+ transactional funding cost. One deal I only made $500.

Your insightful help is greatly appreciated.

Peter Lin

Let me see if I understand your facts. . . You have two properties under one mortgage. You want to see one property and apply the proceeds to the mortgage. Correct?

There are two possible answers to your question. EITHER the bank will simply allow the transaction, because you are going to use the cash to pay down the mortgage. Or, this transaction may already be permitted under your mortgage. You would have to read your mortgage. It appears that you might have a cross-collateral loan. Frankly, without having the documents to review, I cannot give you a complete answer. However, I cannot imagine a good reason for the bank to oppose your transaction..

Now, if you intended to use the closing proceeds for some reason other than reducing the mortgage debt, the bank would likely refuse.

Hope that helps.

-Matt

That’s a great question. Actually, there are several questions involved here.

Fistly, where is this building? What state? What town? I’d need more information, but my first question concerns the zoning. Mixed use properties generally require a variance or special zoning. You might have the current owner seek a variance or rezone the property. Or you rezone it now with the seller’s permission. If you can’t get the rezoning, then you walk away from the purchase.

If you get the zoning, you’ll need to create a corporation (in most states) to serve as the governing building association. Or, you can sometimes organize a condominium through contracts. In either case, you’ll need a plat, new legal descriptions, new deeds, a set of rules or governing documents, etc. Again, I’d need to know whether you live to give you a detailed answer.

As to the 203-k fha loan, I’d suggest you ask a mortgage broker. In fact, see the blog post about the HomePath loan program and contact Mickey Brooks. He can help you with details on specific loan programs.

In theory, when you rezone the building, you are creating two seperate properties with seperate legal descriptions- the living unit and the commercial space. So, in theory, you’re buying two properties simultaneously. To be more precise, your non-profit is buying one unit and you are buying the living unit in the same building on the same day. If your seller is willing to work with you, you can create two purchase agreements that are contingent on full performance of each other. A good real estate lawyer and a good loan broker can make this work for you.

Best of luck.

Matt