You can find a private investor to back you financially or you can find a Hard Money Lender in you area to provide the financing. They are usually very high on the points and interest rates, but there are some that will provide the purchase and rehab funding. This is all if you meet there qualifications for approval.
Also, they (usually) base their loan amounts on the ARV. So if you find a good deal below market value, with enough equity in the deal to roll in your pruchase and rehab cost along with some or all of the closing cost, your good. You must find out their LTV amount based on the ARV and you will be off to a good start with your $5000
Oh yeah almost forgot most important part. . . PLEASE have an exit strategy. Especially with todays market, dont just assume you have a winning deal because you can get it at a great price. Hard money is short term (6m -1yr). Just cause the numbers work doesnt mean the house will sell as soon as you rehab and market it. Watch Property ladder...Good luck with your $5000 Be smart!!!
Your much better off with Tax Lien certs with the amount your working with as someone I believe mentioned. Try Minnesota and Colorado.. You have to travel a bit but well worth the investment.
Just make sure you know what you are buying and your market. This is especially true when dealing with a hard money lender. My take is you need to start with a real good deal to still make money, if you are forced to use their services.
If you are going to go after foreclosure deals and live through the short sale process etc., the very first thing you should do is line up a relationship with a good strong hard money lender. Once you have that in your pocket you can bid with confidence. Also this advantage will make your exit strategy options much more flexible.
Real Estate both up and down here in California presents many opportunities to realize a profit. The important thing is not to be motivated by greed to the point your judgment flies out the window.
Here is a complicated goody from about a month or so ago. Property vacant with a small mortgage/ er Trust Deed on it. The owner is in jail. Seems he socked his wife and that is frowned on here in LaLa land. The full consideration was about $10,000 payable a small amount each month deposited to his draw account in jail. He can buy goodies and stuff. The value of the property about a true $30,000.Vacant Land. Zoned R-2 you can put two houses on it. Quick sale to a builder for $60,000 and the down payment about $10,000. The Builder needs money for construction and he gets it from a Vigarege Lender. Hard Money Lender. Interest 20% all due in 9 months. The houses are built but quickly and the ultimate buyer? You guessed it the original owner newly out of jail. He buys it by renting the property with option to buy and half of the collected rent to be credited toward the purchase price. Of course he cannot get a loan so a PMTD (purchase money trust deed) is created and that in time is laid off with a small discount and 6.5% interest to an institutional lender.
Wow.shades of the Great Depression. Where there is a will there is a way. I understand the old owner now back in possession is going to install a boxing ring and invite his now ex wife over to work out. Only in LaLa land.
Cheers Lucius
my bro just put in a offer on a short for 22.4, the ARV is 80-90K and about 30 k in repairs.
you have to have some expertise, tenacity, etc. to see an opportunity and strike.
You can find a private investor to back you financially or you can find a Hard Money Lender in you area to provide the financing. They are usually very high on the points and interest rates, but there are some that will provide the purchase and rehab funding. This is all if you meet there qualifications for approval.
Also, they (usually) base their loan amounts on the ARV. So if you find a good deal below market value, with enough equity in the deal to roll in your pruchase and rehab cost along with some or all of the closing cost, your good. You must find out their LTV amount based on the ARV and you will be off to a good start with your $5000
Oh yeah almost forgot most important part. . . PLEASE have an exit strategy. Especially with todays market, dont just assume you have a winning deal because you can get it at a great price. Hard money is short term (6m -1yr). Just cause the numbers work doesnt mean the house will sell as soon as you rehab and market it. Watch Property ladder...Good luck with your $5000 Be smart!!!
Chrisopolis, do you already own your own home? If not, think about putting your $5K towards your primary residence....
Your much better off with Tax Lien certs with the amount your working with as someone I believe mentioned. Try Minnesota and Colorado.. You have to travel a bit but well worth the investment.
Just make sure you know what you are buying and your market. This is especially true when dealing with a hard money lender. My take is you need to start with a real good deal to still make money, if you are forced to use their services.
If you are going to go after foreclosure deals and live through the short sale process etc., the very first thing you should do is line up a relationship with a good strong hard money lender. Once you have that in your pocket you can bid with confidence. Also this advantage will make your exit strategy options much more flexible.
Real Estate both up and down here in California presents many opportunities to realize a profit. The important thing is not to be motivated by greed to the point your judgment flies out the window.
Here is a complicated goody from about a month or so ago. Property vacant with a small mortgage/ er Trust Deed on it. The owner is in jail. Seems he socked his wife and that is frowned on here in LaLa land. The full consideration was about $10,000 payable a small amount each month deposited to his draw account in jail. He can buy goodies and stuff. The value of the property about a true $30,000.Vacant Land. Zoned R-2 you can put two houses on it. Quick sale to a builder for $60,000 and the down payment about $10,000. The Builder needs money for construction and he gets it from a Vigarege Lender. Hard Money Lender. Interest 20% all due in 9 months. The houses are built but quickly and the ultimate buyer? You guessed it the original owner newly out of jail. He buys it by renting the property with option to buy and half of the collected rent to be credited toward the purchase price. Of course he cannot get a loan so a PMTD (purchase money trust deed) is created and that in time is laid off with a small discount and 6.5% interest to an institutional lender.
Wow.shades of the Great Depression. Where there is a will there is a way. I understand the old owner now back in possession is going to install a boxing ring and invite his now ex wife over to work out. Only in LaLa land.
Cheers Lucius