What are my options

[ayesha]

I would like to buy a fourplex in CA. The property is in preforclosure. I would like to offer 200,000 and would go no more than 235,000. my question is, can i get a loan with 5% down? I only have $20,000 saved and would like to put less than that down. also would like to get the lowest rate possible. i never bought a home before and don't know too much about mortgage, especially with all the recent changes.

[Michael Quarles]

Good Morning...

Why do you want to buy a 4-plex? What is your exit strategy? Where is the money going to come from if it is 100% vacant? Where are your reserves? What type of Investor are you?
Answer these questions and I think you’ll see that wanting to do a deal is the wrong mind frame, the first thing you need to do is make certain it is a deal..
I hate breaking the bubble but you’re setting yourself up for destruction. Not having a good understanding of mortgages tells me that you are fairly new at REIing and if so a 4-plex with only 20k is way outside what you should concentrate on..
I mentor people all of the time who start out with big dreams because they watched a late night get rich through real estate program and the reality is that you need an education just like any other career choice.
The problem with REI is that many get their education via the Hard Knocks and if your first deal is a washout then it will be your last. Real estate vocational training is possible but requires a lot of hard work.
You’re welcome to contact me if you have any California Questions 661-900-8056

[ayesha]

Good Morning...

Why do you want to buy a 4-plex?
I will live in one of the the units and hopefully have the other tenants pay for the mortgage. Right now the rent is $610 per unit.
What is your exit strategy?
I plan on holding on to the property.
Where is the money going to come from if it is 100% vacant?
I will be living in one unit. I am renting now and paying more than what a $200,000 mortgage payment will be.
Where are your reserves?
In the bank aside from what I have for down payment.
What type of Investor are you?
I am not an investor I have a lot of learning to do about real estate investing.

Answer these questions and I think you’ll see that wanting to do a deal is the wrong mind frame, the first thing you need to do is make certain it is a deal.
I hate breaking the bubble but you’re setting yourself up for destruction.
I haven't set myself up for destruction yet, I am researching and have spoken to people about mortgages, and i am asking for the advice of the forum. yes i want a deal but i prefer not to self destruct, so i am patient and reading and trying to learn.

Not having a good understanding of mortgages tells me that you are fairly new at REIing and if so a 4-plex with only 20k is way outside what you should concentrate on..
I mentor people all of the time who start out with big dreams because they watched a late night get rich through real estate program and the reality is that you need an education just like any other career choice.
i have big dreams but it didn't come from watching late night get rich program. i realize education is needed and that's why i haven't acted on anything.
The problem with REI is that many get their education via the Hard Knocks and if your first deal is a washout then it will be your last. Real estate vocational training is possible but requires a lot of hard work.
You’re welcome to contact me if you have any California Questions 661-900-8056

Thanks for your response and I'll probably be calling you.

ayesha

[Michael Quarles]

I like your answers...