1st Investment Prop

[jamj321]

Hi all,

I put an offer in on a house but now I am having trouble getting financed. What banks work with new investors. I have deffered student loans and that seems to be the biggest problem. My fico is good. HELP!!!!:SM021: :praise: :praise: :praise:

[Ted_IL]

Have you ever thought about learning to invest without using banks?

That would be my advice.

[jamj321]

Please elaborate!

[Jim FL]

jamj321,
What Ted is referring to, is commonly called in forums like this, 'creative real estate investing'.

Basically, it is where you buy real estate, without having to qualify for, or obtain loans.

Various forms of seller financing.
Some where the seller plays the bank, you take title, they hold a mortgage or deed of trust, and you pay the seller, monthly, until paid off.

Other ways, subect to the existing financing.
This is where you take ownership of the property (Title), and leave the existing loan in place, and continue to make payments on it.
There are details to this, but more than can be posted in one general post.
Do a search on my name here, (click it and find all threads/posts from me), and you'll see some posts discuss this method in detail.

Contract installment sale.
this is another form of seller financing, where you make payments to the seller, and then title passes to you, once you've completed the contract. (read that, pay it off, or refi).

There is wholesaleing, commonly called flipping by some.
This is where you find a good deal, lock it up in a contract, and sell that contract to another investor for a fee, and they close in your place.
No cash or loans needed there either......at least not substantial cash, just small for marketing, earnest money, etc.

There are lease options, sandwich lease options, where you get a seller to agree to a preset price and terms to buy later......or the right to, not obligation, along with the right to rent/lease the place, and sub-lease/option it to another........keeping the difference.

There is also 'bird dogging', or deal locators.
This is like wholesaling, except you simply pass on leads and some info, for cash to the investor who buys the house. you get paid for the referal basically.

There are more ways than I can count to invest without using banks, loans, credit, cash, etc.
These are but a few of the more common ones.

I'd suggest you read Dans free book here:
Magicbullets in real estate, it is listed in the forum and on the main page.

then, read as much of the forum as you can, and ask questions.
That is what we are here for.

Good luck, and welcome to magicbullets.
You have found the best FREE online resource for investors of all levels of experience, from beginner wanting to invest, to those of us with some wear and tear.

Take care,
Jim FL

[Ned Carey]

Part of the problem may be the wrong kind of lender. Many investors go to banks or mortgage brokers that are geared towards homeowners. Despite their claims they really don't know or have products for investors.

For rehab properties you can go to a "hard money lender". These are private lenders that specialize in lending for rehabs. They base what they lend primarily on the value of the property and much less on you personal credit. They will typically lend 65% of the "After Repair Value" at 15% and 3 points~.

Another option is smaller local banks or "Portfolio Lenders". A bank that is a portfolio lender loans their own money and doesn't sell the loan to the secondary market. This means they make their own rules as to who they will lend to, and can be a little more flexible.

Lastly you can use private lenders, friends and family and pay them 8-15% interest. That is much more than they can get elsewhere and may be cheaper that you can get. Using their money in addition to the two above can really make deals happen.

Also sometimes new investors choose the wrong strategy based on their resources. Buying rentals with traditional bank financing takes some established financial resources. Creative financing OR different strategys like wholesaling may be a better way to start.

Ned Carey
http://baltimorerealestateinvestingblog.com/