Financing For Those W/horrible Credit!
I am in the midst of educating myself on the ins and outs of commercial real-estate; the problem is, I need to find funding without using my own credit. You see, I am a graduating college student who messed up his credit with plastic right outta high school, not to mention I never had much credit to begin with.
So what I am asking is, how do I purchase property without having to live up to the stringent credit requirements of institutional lenders? I have a business partner (who is also right out of college, with better credit but still only a few years worth), so I feel the need not to dilute too much. Any suggestions, and questions to help you guys better understand my situation?
-New guy-
How bad is bad? Your best bet is to seek a stated income commercial lender. I know of one who will go down to 575. They do not require any asset, income or tax return verifications. In this instance the lender places a high value on the appraisal and also the flow of the property.
Wow, didnt know they existed. that would work for me. What about interest rates with such an instituiton?
I think you will have a hard time if you plan to invest using conventional financing.
I would advise you to learn how to creatively invest in real estate. There are many programs and books available that teach you ways to finance the purchase of a property without using conventional loan financing.
GOOD LUCK
many people seem to refer to these books that are great or these courses that are very helpful, however direct reference to them seems to be somewhat like finding the all mysterious unicorn. can you tell me for instance what books, courses you may be refering to or is that "advertising" and thereby disallowed? :-?
[addsig]
I got my start with the Carelton Sheets no down payment course. I bought it with the full intention of sending it back after a few days but thought the information was worth the price after they agreed to send me their advanced series for free as well as 0% payments for 1 year.
The course gave me an excellent overview of how to invest in real estate but left out some key parts of investing that probably could have helped me avoid losing $25k or so on my first deal.
I bought the property on contract for deed rather than sub2 and I raised my offer to cover the mortgage balance because I had no idea about a short sale.
The modivation for all of this came from Robert Kiyosaki and the book Rich Dad Poor Dad. I highly recommend this as a first read and also onto Cashflow Quadrant. The rest of his books are very good also but those two are the best.
This site I consider a wonderful resource for questions to other investors but you can't simply use it as your only source of information.
GOOD LUCK
I'm not an expert here by any means, but I'm learning so much about owner financing! That is a great way to get into properties! I've met some people who have done it. I agree with MyFrogger, get creative!
Ginnie
I'm not an expert here by any means, but I'm learning so much about owner financing! That is a great way to get into properties! I've met some people who have done it. I agree with MyFrogger, get creative!
Ginnie
If it's ok I'm going to put my post here as well I'm in the same boat as the original poster.
Well here's the latest info on the first property.
The seller is an agent that bought the property wholesale and has rehabbed it and current appraisal done in August comes in at $350K. They're offering the property at $250K but buyer must show financing approval with offer. The $100K difference will be credited to the buyer at closing and can be used for dnpymt and cc. IN essence a $0 money down if the bank does not require seasoned dnpymt.
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Another property along the same lines is a 20 unit asking $790K but seller will give a $150K rehab credit to buyer at closing. NO appraisal numbers........ but it is 100%occupied as of last week, so rehab may not be immediaitely needed. If a deal can be structured and accepted by the bank, sould/would the contract price be $640k and 20%dn and cc can be used from the rehab credit? providing appraisal suffices. Thanks for all advice.
New Guy,
There are many new investors that buy property right out of college and sometimes high school. Thing is, even with no credit/bruised credit you should still be able to qualify for @ 80% of the sale price. Be creative, find a seller motivated to hold the other 20% required to fund the loan. They are out there you just need to do your due dilligence and find them.
good luck, congrats on degree
what sre sub2, short sale and owner financing?