Small Loan Question

[Brian Barringer]

here is a question for you folks:

Are all small deals done with cash?

What kind of loan programs are there for purchasing a home under 25k as an investment or is seller financing the only option?

I would like to buy a hud home in Buffalo for 10k and putting 10k on repairs then rent it out I would rather use a loan then pay cash ofcourse.

[dealmaker]

Cash is king, especially in this price range.

Another way is Hard Money Lenders, (HMLs). Generally these are private investors, expect points in the 4%-6% range, annual interest in the 15%-18% range. Hence the term HARD MONEY. Hence you need to make sure that the deal is fat enough to handle that.

Myself and others on this site have lent (and some of us have borrowed) on these kinds of terms. Another alternative is "equity sharing", but most astute buyers don't like to do those because you're giving up too big a part of your deal.

dealmaker

[LeadingEdge]

I am in the same boat. I was looking for a creative way to get into a primary residence and being the hosues in our area all sell for less than 50K or the majority of them do. I could not find a lender. I came across one lender who has 10 lenders who does loans down to 40K and he has 3 lenders that will go as low as 25K. The rate depends on your FICO though. I have a 630 fico now and I got it for 9% with no money out pocket and cash at closing.

They are out there just keep looking as it took me 4 weeks to find a guy to do this for me. Persistance is the key and the only lock in your way to a financially sound future is yourself is what I was told. Dont limit yourself from a NO just because one says it doesnt mean it isnt possible.

I am only new at this too. I just started 4 weeks ago looking into stuff and not reading any of the courses or books but just from forums. I now have 1,211 deals sent to me that meet a 70% price tag minus the cost of repairs in comparison to the ARV. I sent out a mass email and networkked and got a tonne of replies. I did not understand birddogging but I do now.


I would suggest if you are in same boat as me and a dirt farmer poor just starting try finding a few deals QUICK. Do an option to buy in 60 days and sell those leads to one who can do it with a margin in there for yourself or partner or just a flat bird dog fee of a grand a closing.

ASK QUESTIONS !!!!

People on these forums help and will help alot if you just ask. Together the boat rows along....................ALONE and your in circles!!!! :SM031: :SM031: :SM031:

[dealmaker]

Great catch there leading edge;

A wise man once told me: "loan officers get paid the same regardless of how many loans they denie, but mortgage brokers only get paid on deals they close". I didn't mention mortgage brokers because of the small dollars involved, but heck it's another way to network.

Now we have to get you out of that NINE PERCENT RATE. Are you working on that?

dealmaker

[EllieW]

here is a question for you folks:
......................
I would like to buy a hud home in Buffalo for 10k and putting 10k on repairs then rent it out I would rather use a loan then pay cash ofcourse.

Have you looked into Government Grants for the repairs? My partner was telling me about Grants to repair and you have to rent to Section 8 (low income) -- I think you have to rent for 5 years.....

I'll be talking to my partner late tonight -- I'll see if I can get the name of the grant.....

Ellie

[David Leach]

I don't know what your credit situation is, but if you have good credit, there are companies that will give small businesses a line of credit. You can also secure a line of credit if you have formed an LLC or Corporation that has been structured specifically for the purpose of real estate investing.

If that doesn't work, what about getting a couple of credit cards with limits around $5000 - $10,000? I have a friend who bought a fixer with a credit card. He sold it in less than 60 days, so the cost of the loan was minimal, as he has one of those cards with a rate of 3.9%. Even if the rate is higher, it can still work.

Make sure you're not the type who can't go by the computer store without "whipping out" the plastic to buy a new toy.

[LeadingEdge]

Great catch there leading edge;

A wise man once told me: "loan officers get paid the same regardless of how many loans they denie, but mortgage brokers only get paid on deals they close". I didn't mention mortgage brokers because of the small dollars involved, but heck it's another way to network.

Now we have to get you out of that NINE PERCENT RATE. Are you working on that?

dealmaker

Yes I have that already worked out. I planned on this at first and luckily found that before this loan guy.

I have a company who will refinance the day after closing IF I am IN IT. That way I will refinance and pull the equity out to pay for the UHAUL To my next deal.... I think I am learning how this is done but lots to go yet. :grin: :beer: :SM119: