Buying an Investor Flip

My husband and I have submitted an offer on a house and it was accepted on Friday evening. So we are on day 2 of our 30 day close period. The house we are purchasing is an investor flip in the Montrose area. The seller, an investor group incorporated as a LLC) purchased it on April 19th, put some nice finishes and quality work into the house, and has brought it to market about a week and a half ago. There were multiple bids, and at the end, we won the bid because our credit quality and "closeability" was assessed to be the best of the bunch. We are hoping to finance 80% of the purchase price with a conforming 30 year fixed rate conventional loan. We have the 20% downpayment ready to go. The seller's agent, tells us that he will not provide any documentation regarding the LLC's members or organization structure to lenders. He assures us that the title company, an affiliated division of the company that owns the real estate company that the seller's agent either owns or works for), has all the info it needs to provide a lender's policy. The seller's agent has indicated that the seller will also NOT provide any receipts or invoices related to the rehab work to lenders. And he is strongly pushing us to go with a lender who we have no relationship with, but who has helped him with closing deals in the past. I talked to one lender who said that since the house was owned by the seller for less than 90 days, he will need to see documentation of the LLC's organization. I talked to another lender who said that he doesn't need invoices/receipts, but will need proof of authorized signer on the LLC's behalf. I can't get in touch with our Redfin agent to find out if the seller will agree to provide the proof of authorized signer. My gut feeling is that he will not be willing to provide any such documentation. We like the house very much, however, we don't want to be party to a fraudulent transaction. Can anyone help us see through all this secrecy? Why is the seller unwilling to share the LLC organization documentation to our lender of choice? It seems very unfair that the only lender the seller is willing to let us close our loan with is the lender of their choice. Also, how can we possibly know if there is loan fraud going on if we go with the lender of their choice? by firstjamie from Savannah, Georgia. Jul 13th 2011 Reply