OfflineOkay I've found two houses that are for sale between $10,000 and $14,000. One was a foreclosure and the other one is owned by an older man that doesn't want to mess with it anymore.
My question is that since they're both on the market for such a low price if I could use a hard money lender to assist in purchasing the properties?
Here's what I was thinking....
1. I find a hard money lender that would be willing to give me a short-term (maybe 60-90 day) loan against the property for the exact amount of the purchase price.
2. I buy the property with that from the hard money lender.
3. As soon as the property is in my name I then go to the bank and take out a loan against the property to pay the HML and for any repairs or fix-ups the house may need.
4. After that I put the house back on the market and sell it around what it is appraised for.
The only thing that's holding me up on this is I wasn't sure if I could get a loan against the house with the hard money lender's name on the property for the initial loan. Any advice would be greatly appreciated.
See what the FMV on the properties are,ask your agent for comps,that will give you an idea on how much you will offer. estimate what the costs of repairs will be and deduct them from your offer ,as for the older man ,ask him if he is willing to hold the mortgage for you, maybe at no interest if he owns the home out right.If you use HM you will have to make sure you have enough equity in the property to refi. shop around to find a HM lender that fits your needs. Some have very high rates compared to others. speak to a few of them and see what they can do, some may be open to negotiate on some of the terms.MOST I HAVE SPOKEN TO IN MY AREA WANT 20% DOWN so you have skin in the game and 14%.If you can find a PML ( family or friends) that will lend you on the deal,than that is the way to go.
2nd, You need to find a bank that will do no seasoning refi's(Rina just did a post on this) or you will be holding the property for 3-6 months before you can refi. do your due diligence and make sure you are in good shape.
good luck and great going taking action.
Richie.