Have Cash, No Current Income
My parents were self-employed but bc of the economy and other reasons, had to close down the business (travel agency). They however, were able to save up some cash, around 30K and is considering purchasing a multi-unit property (preferably 5+ units) for them to live in and get income.
Given that they don't currently have jobs, what are their options?
Thanks!!!
Well if the are looking for a multi unit building, if the building debt services, there are non recourse loans available for it. If the property you are looking is the New York City or surrounding areas, there are some no doc commercial programs available to them as well. PM if you have any particualr scenairos to go over.
If there credit is somewhat good you could get a 300K loan for the 30K down. You may want to look at that price range to start, or look for ads that state owner financing, or seller secondary financing to ghelp as well. Given the smaller amount and no current income, you may want to broaden your search nationwide to see what other areas you can get. New york city is quite expensive. Some of the suburban areas of upstate new york there are deals to be had, or midwest is good right now. If you have any problems just post here again or PM any one of us for help.
Good Luck,
Kyle
I serioulsy doubt you will find a multi-family in the tri-state area for 300K? If you do, then it will probably require alot of money to get it into a habitat state.
You may want to think about other areas including another state for that matter. If you parents are near the retirement age, take this opportunity to move to FL where the selection of multi-family are plentiful and affordable.
Good luck.
Look for a flexible seller who will finance it all with $25K down. Another scenario, look for a semi-flexible seller and lender.
Here's another way to structure it:
$30K down
$30K carried second
$240 on a first
Keep in mind that 5plexes are difficult to finance and difficult to sell for the same reason. Often owners of 5 plexes are more flexible and motivated.
5+ units = commercial property = commercial loan. You should get a better cap rate for it (than compared to a 4 plex). Additionally, they'll thoroughly examine the PROPERTY FIRST and your father (his credit, income, ratios, experience SECOND). This is completly opposite a residential loan. They'll verify that the income of the property will support the debt, by requiring a DSCR of 1.2 (minimum) or greater. If it's over 1.5 you'll be fine.
Make sure your lenders will allow a deal that's creativly structured. If you can find flexible/motivated sellers, you'll be in good shape.