NEED HELP WITH FIRST PURCHASE!!
I need help with my first purchase. I found a motivated seller and her house has been on the market for a year. The house is nice and in move in condition. It was appraised at 80k and listed for 67k. My credit score is in the 570 range so I don't think I can get financing for it. What are my other options?
I would suggest going to your local investment club for private investors or looking up hard money lenders in your area because they will loan money based on the equity of the property rather than credit.
What are your plans for the property?
Are you going to move in yourself?
Need a little more info....
A house that is priced right and in perfect condition should have sold? I don't see why it has been on the market for one year.... I'd be careful.
Also based on the appraisal, the listing price seems high. In my area the appraisal is high usually.[ Edited by myfrogger on Date 11/19/2003 ]
I would like to use it as a rental property. I don't know why it has been on the market for so long, it's in pretty good condition, just needs a little paint and is located two blocks from a school. Any other suggestions would be highly appreciated!!
Has it been on the market as a FSBO or wih an agent? I'm trying to find out whether it has been actively marketed the way an agent does, or just a sign in the yard.
there are plenty of banks that lend to individuals such as yourself with credit scores in that range. Argent has a good investment purchase program, as well as BNC. I could go on and on. You are definetly loanable, i wouldn't suggest a hard money or private lender.
Try doing an FHA loan with 3% down. Fico scores are not important when purchasing using an FHA loan. You might have to bump the loan to 75K as most lenders minimum. Talk to your mortgage broker, they have various programs for you. Good luck.
Here is what I would do...
Asking price is 67k, if the home has been on MLS for a year, then im sure they are motivated. I'd offer 50k They will most likely counter offer with 55. So now your looking at 32k from the apraised value. Get the house undercontract to close in 30-45 days with these conditions....
1) Contract must be assignable
2) SUbject to qualified third party buyer
3) subject to suitable financing.
This basically will give you 30-45 days to find a buyer, so now you start calling your local investors. The guys with the signs that say "WE buy houses cash" stuff like that, and those in the newspaper. Maybe even market the house as a handy man special in the paper. Either way, you get for 55, try to assign it to an investor or rehabber for 65k or so, and walk away with 10k without spending a dime.
Quote:
On 2003-11-20 10:44, birddog_USA wrote:
Here is what I would do...
Asking price is 67k, if the home has been on MLS for a year, then im sure they are motivated. I'd offer 50k They will most likely counter offer with 55. So now your looking at 32k from the apraised value. Get the house undercontract to close in 30-45 days with these conditions....
1) Contract must be assignable
2) SUbject to qualified third party buyer
3) subject to suitable financing.
This basically will give you 30-45 days to find a buyer, so now you start calling your local investors. The guys with the signs that say "WE buy houses cash" stuff like that, and those in the newspaper. Maybe even market the house as a handy man special in the paper. Either way, you get for 55, try to assign it to an investor or rehabber for 65k or so, and walk away with 10k without spending a dime.
Birdog,
I'm a newbie, interested in beginning this way. How is $$ exchanged? Do you get financing for the $55K, and would this private investor pay $65 outright..or do you receive that $10 profit immediately or over a course of time?
Just not too clear on how the wholesale process works and the roles each person in the transaction plays.
Thanks for the insight..I never realized who those "I buy houses" people were.
birdog's advice makes no sense. If they have it listed and have been trying to sell it for 67. There is no way a rehaber or someone who buys wholesale is going to buy for 65. Thats 2k off of percieved retail. If you want the house. I would try and buy it as owner occupied.(do you currently own a home?) if so. Then I would try and do owner financing. (Get him to hold 20%) then get a loan for rest.
There are lenders out there that will finance you for the loan as either an investment or FHA, before committing to one loan type or another, make sure your debt to income ratios are in line, and check down payment funds seasoning requirement. You want to have no seasoning of downpayment funds to have the most flexibility. As an investment you can usually get away with 5% of your funds required for the deal. If there is no seasoning of funds you can usually use one the down payment funds company to show the money for you. If going as a non owner occupied, also have a lease agreement in place to move into the the property the day of delivery of the home. That will take the mortgage out of your debt ratio, making it easier to qualify for the loan.