Need financing advice, tips......

lets try this, why does it do that?

Hey everyone, my name is Ben and in just one week I have found two great houses by FSBO, in the nicest neighborhood in my area at great deals. Both are very motivated sellers and really really want to get out of their houses. I could buy both of these houses and have positive cash flow but I was wondering what avenue of financing I should take. Dean, I know you watch these boards and your a finance wizard - any ideas on what I should do? The following is the email I sent to CBR....

CBR,

I know what you mean, there are two houses that I would love to buy - and I have only been at this for over a week. Question is how did you do your financing? I have never owned a home and have good credit so on one home I can buy with 102% financing. This home I could get for $235k at about 30k below market value and rent it for about $1900 a month - its a SFR. The other home was offered to me way below market value with no down payment and owner financing. This house is probably $100,000 below market value and is essentially a tri-plex but a beautiful old home with a need of a few touch ups, but could rent at about $1700, or $2300 without me living in it. The only question is - can I buy the one house with no money down, then use the equity out of it to pay 10% down on another property - the only financing I could get with investment property is 7% and 10% down. I would have to cover the equity finance from this house with the rent net from the next one. Then take the equity out of that house, and so on and so on. I would definately have to get mortgages that were "unseasoned". How did you do your financing? Also, how have you been finding REO houses at such good deals? Most of the REO lenders in my area have sent their houses to realtors and its hard to find good deals. Thanks man, your a great inspiration.......

Ben

Because you are looking at holding the properties you have mentioned you will want low interest rates to get the payment low enough to cash flow.

The property with the 100k in equity may be able to have money pulled out. Rare as they are, no seasoning cash out refinances are available. Most of these refinances seem to only go to about 70% of the value which may not be high enough for you. Most lenders seem to be requiring about 6 months of payments / seasoning on the property.

Another thought: You may get a private lender - family or friends - to loan the money as an equity loan on one of the properties then move the money to the next property and so on.

Hello, my name is Glenda and I need some advice on financing properties. I have Think a little different program which is awsome. I have found a "steal" of a deal on a foreclosure property in which I am making the offer this week. My credit is not the greatest in which I was denied a loan from the bank. What tips would you suggest to me at this point. I also have my eye on two other properties....buy owners. Thanks for your help. I am excited to get this business going. This program has really helped me step out of my comfort zone.

same position that i'm in, and here's whats available: #1: HARD MONEY lender could be possible IF the deal is good enough, #2: OWNER FINANCING just like the post above yours has stated, in the 2nd deal he talked about the owner willing to do the financing of the deal(which would probably be the best option), #3 like nstreet said, PRIVATE MONEY maybe a family member or somebody that has money tied up in CD's, #4 PARTNER: try to get an equity partner and have him put or front the money for the deal, i'm sure i may have left some other options out as well, but this would be the most common, aside from traditional financing, SULLY.

I sure do appreciate your help. After getting turned down for a loan I was so sad. Of course negative thoughts immediately came to mind. I sure want to get some deals going. I am going to try some of your suggestions and keep on keepin' on. HA! I will keep in touch and let you know what happens when my first" Gem Deal" comes about.

Hi, I personally would not recomend hard money lenders all due to the fact that you have a much shorter time frame to have to repay it back. Give it some time and really do your research on them.

but, in sunshines position she needs to take what she can get, i know i would, if a HARD MONEY lender wants to work with me, and i can't get approved for conventional financing because my credits shot, sorry, but i'm taking everything that i can get, BOTTOM LINE: if a HARD MONEY lender is willing to work with you SUNSHINE, TAKE IT, YOUR HERO< SULLY.

Also, if the owner isn't willing to carry, maybe you could lease purchase for a year, with the option of a 1 year extension, while you get your credit cleaned up, which I would do ASAP. Just make sure your contract allows you to sub lease/assign the lease to someone else. Just a thought from another newbie!

Roni

yeah, there you go, not a bad idea, just another option for you, SULLY.

Just be careful with the hard money lenders, you have to be on top of your game to repay the loan alot sooner than a traditional mortgage, check them out and don't dive in head first.

I sure do appreciate all the advice from you all. I sure am glad this site is here. I have learned so much. I am still waiting to receive my book. I can not wait to get it. I think it will clear up a lot of questions I have and help me step out of my comfort zone. I am reading the small books that came with the Think a little different program. They are very helpful. Thanks again for your help everyone. I am going to study and read a bit more before I "plunge" into my first offer.

Sunshine

You have chosen wisely!! Likewise, we're glad your here with us.

Hello,
My wife and I have found a property that we are researching and we see a great potential in it. This property has 4 1br apts, 3 rented, and 2 storefrounts, 1 rented. There is a great deal of remodeling potential to increase income. It is a pre civil war building with a lot of history. The owners of the neighboring buildings are giving their property facelifts, so value will soon be increasing. The catch is the area banks consider this a commercial property and I cannot get around the need for a down payment of 20%. This would be our first deal if we can make it work. The owner wants out of the property but he is not advertising it other than word of mouth, he also is not in a great hurry. He said the price is firm. I don't think he will negociate the price down any. It is a very good price a realter friend of mine told me. The owner also doesn't seem to want to finance any portion of the price himself. Does anyone have suggestions?

Hey all I'm new to investing and a lender I'm working with said my credit is not to bad but I should do a credit clean up to take off some old bad debt and he can have someone do all the work for me for 175$ should I do this?

Yes you should do that but make sure that you right a check to the company name not the person. And stey in touch with them weil they are doing it get a copy before and after so you can see what they did and what they going to fix exactly. Lilie

Thanks for the info lilie I will do exactly that I already got a copy of my report but I sure will ask for another when he's done.
Thanks

Yes. Move on.

Go back and re-read what you wrote: "The owner wants out of the property but he is not advertising it other than word of mouth, he also is not in a great hurry. He said the price is firm. I don't think he will negociate the price down any. "

This is NOT a motivated seller. Find one who is.

I am a new wanna be investor. I obtained a $15,000.00 line of credit from my bank but when I talked to a lender they told me I would need 20% down if I purchase an investment property. Anybody have any ideas on how I get around that? I do not have money for a down payment.