NEED ANSWERS QUICK........
I've found a property that is listed in the real estate section for $12,500. It's in a nice neighborhood and in sound condition and can be used as rental property. Of course I will do the cleaning inside and put in a stove and refrigerator. I think it was foreclosed on by the last owner and now a bank owns it. The problem is I don't hae $12,500. My husband has bad credit but his credit is better than mine and he has been employed with the same co. for almost 3 years. What should we do. Would the bank lend us the money if we tell them that we're planning on using the property for rental income, and of course they will use the property for collateral. Will they lend us the money if we agree to pay a higher interest rate. I know this doesn't sound like much to you professional investors, but we'd like to start somewhere and if no one gives us a chance to prove ourselves, how can we start.
Hi,
Given the unmentioned fact that the property is worth a lot more than $12500 (I hope my guess is right), and the fact that the rent in this particular neighborhood is high enough to cover any repairs, mortgage payment, taxes, insurance, etc., I would say that your best bet is a Hard Money Lender.
Most banks tend to have a certain box you must fit inside, or else no credit is extended. Hard Money doesn't care about your credit, just about equity. They tend to lend around 65% of the property's value, charge many points up front and high interest, but if that is what it takes and you can still make a profit, it's probably the way to go.
Another option is to get a partner with good credit or one with some creditcards, for instance. In this case it would cost you not so muchy in interest, or in points, but moreso in ownership. (How much is yours and how much belongs to the partner).
Good Luck
I think you will have a hard time finding a bank to lend under 25K. Best bet is to get a partner or use a hard money lender. Keep in mind a HML's will normally only do short term loans (6-12mo's). In my market a 12K property with a little TLC can easily become a 30-45K property.
I think you will have a hard time finding a bank to lend under 25K. Best bet is to get a partner or use a hard money lender. Keep in mind a HML's will normally only do short term loans (6-12mo's). In my market a 12K property with a little TLC can easily become a 30-45K property.
Yup, to advise you on this one, we need to know what the property is worth. Also, it is important to know who owns the property. If the bank owns it and you can verify to them that you can make the payments, they may agree to a mortgage, but I doubt it. If an individual owns it, you might have some success with getting them to finance it for you, especially considering the low sale price.
Lastly, you might consider other investing strategies. If you have a groovy banker in the reo Dept. (assuming it is bank-owned), they may let you contract and flip the property. Otherwise, you can bird dog it to another investor for a few bucks.
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