100% LTV Financing
Has anyone used 100% LTV financing to buy investment properties? I'm looking to buy a duplex and that seems like an easy way to do it with little money down, assuming I qualify. Any drawbacks to that?
100% financing is only available for people with high credit scores (720 and above) with full-documentation of income and assets. You shouldn't expect to make any money on the rent when using 100% financing as the mortgage payments will be equal to or more than the monthly rent.
Lenders I deal with will do 100% financing on investment properties with a minimum of 680 credit score. As for the property cash flowing, well that depends on how good the deal is. The 1% rule (rents to selling price) can be a guide to at least causing the property to debt service (pay for itself).
I have done 4 100% deals, over the past 6 months. The deals are out there, may need to work with several mortage companies or brokers (don't pay too much attention if they say "no way" - keep checkings - I use 3 compnies and they all have different criteria). Things to consider; cashflow - ensure you run the numbers so you don't get stuck losing money - 100% eliminates many deals because it eat-up monthly cashflow. Also need to figure in PMI - adds another $25-50 to the payment. Don't give up and good luck!
Not sure about that whole 1% rule anyways. What is the Cap? I think that is what you should be looking at. Use the ProForma-nator in this website... Just like it was said before, you can get 100% LTV... Look... And it still can be a good deal, (seller can be selling low). But just make sure your taking in to account of expenses and PMI and debt services and that junk to see if its a good deal.. I hate that 1% rule... Thats just me though..
We do 100% financing by working with a portfolio lender who loans up to 80% of fair market value on purchases. Most lenders do the lesser of the FMV and sales price.
Try to get a relationship like that or use hard money and then immediately refi into an I/O ARM that has no appraised value seasoning and you're good to go.
[addsig]
Quote:
On 2004-02-25 15:13, Lewis28 wrote:
Has anyone used 100% LTV financing to buy investment properties? I'm looking to buy a duplex and that seems like an easy way to do it with little money down, assuming I qualify. Any drawbacks to that?
I'd be interested in knowing whether or not you can provide full-doc for your income. 2 years w-2s, bank statements, paystubs, 2-6 reserves, meet debt-income ratios, if self-employed, cpa letter and last two years returns.
If not, then expect 95% cltv loan programs for stated or full-doc, 620 and above fico scores, and 2, 3, or 5 year ARMs. There are interest-only options as well for 95% cltv programs.
If going 100% or 95% try to get 80/20 or 80/15 combo loans. Saves the PMI and the payment is usually lower when compared to the payment plus PMI.
Someone help me out. I hear all about these 80-90%LTV loans, but my brokers can barely get me a stated 90% purchase price loan. How about a PM with where i can get an 80-85% ltv on a duplex. Paid $54,000, 1st $48,500, appraised $93,000, closed yesterday.
Thanks all
MArty
i have done 5 100% deals here in mid-michigan, did need score above 720 otherwise they ran perfectly. i aquired $1.2 mil worth of properties w/these 100% programs...no out of pocket. i was able to cashflow these props by negotiating the price to 15% below market...which we all should be doing as we make our money when we purchase. i clear over $36k profit annually from this $1.2 mil base. Challenge now is to come up with 10% down for my future deals since 100% lenders cap you at 5 deals : (
nothing holds you back in this business but yourself...keep on keeping on...it works : )
Thanks for the info guys.