Advise Needed On Creative Financing
I want to badly purchase a goldmine 3-unit on the market for 3 days. I need $190k for the purchse.
I currently own a $140K 3-unit (that I will sell after purchasing this new 3-unit) with no mortgage, and a $140K house that I rent with no mortgage. I live in my $165K home which has a HELOC of $133K and another HELOC for $64K (both maxed out).
Now, I do not work. The income from the house and 3-unit is enough to pay the HELOC's and then my girlfriend pays for utils/taxes/food/gas in he house we live in.
I want this 3-unit in the worst way; it is a goldmine and perfect for me. However, I am trying to figure out the cheapest way to get it.
I plan on selling the current 3-unit AND the house I rent, but my agent doesn't think the seller will accept an offer contigent upon my selling one.
Does anyone have an idea of how I can get financing for it? Keep in mind, I am selling my $140K house and $140K 3-unit. So a temporary loan would work too.
My 2 ideas so far are:
(1) No doc loan: I take out $80K from my credit cards and use it for down money and get a $110K No-doc loan. But does that $80K need to be stting in the bank in a no-doc?
(2) Get a HELOC on the home I rent out (about $110K) and $80K from my credit cards. However, I would have to tell the lender that I live there to get the HELOC, right? Will that work if I just give that address as my new address?
In either case, I would then sell my 3-unit AND the home I rent out to pay off the credit cards and other HELOC's.
Are there any other ideas out there for someone who doesn't work? With the HELOC idea, I would state that I do work; I did this with 2 HELOC's before and they both went thru with no problems since I also have perfect credit.
Thanks a million! I need this property to make my life complete!
Do you mean a structured loan program or the HELOC?
Thanks again!
Tony,
You can't state that you work when you don't. There are no doc loans that can help you. There are also Subject to loans to help pay for closing costs, ect on these types of loans.
Lori
[addsig]
Welcome to TCI tony,
What you want to say is you need a bridge loan. hard money landerfs are perfect for that but your have another problem:
it looks to me that you are more then maxed out. You are over leveraged and that's the good formula for future bankruptcy. Just think fo the moment; what about if your girlfriend lives you or losses her job, roof or plumbing start leaking, etc. I understand that there is a better deal around the corner but then you do not want to jump into bigger fire that can consume all you have. Try speaking fwith the seller and offer a bit more if he gives you the time to set yourself up for acquisition.
Good luck!
PS
Be aware of the board hustlers who tends to provide falls, incorrect, half correct or otherwise faulty and/or inconsiderate to a main question response. I found that Lori "tinman1755" does exactly that. Yes skillfully to avoid the board jail but in hart, that's it and in my opinion, members that post such responses should be admonished buy any poster who she disrespect buy placing the self serving, business hustling and topic ignoring post.
If I understand your post right you have $260 in equity between your home and the triplex, right?
Have the seller do a wraparound mortgage with a 2 year balloon. Give him a 1st position lien against one of your other properties. Then sell the properties and cash him out.
Seems simple, unless I'm missing something.
Wooah...hold up there buddy! Why sell your current 3plex??? It seems to me that with 280k of equity and a 190k loan needed that you lave a 67.9% LTV loan! Any bank should give you that....and that isn't even counting that you can pledge the property you are purchasing! You likely only need to pledge one of your properties!
My advise is to keep all three properties... Are you concerned about overleveraging, management, or what? You can always sell your old 3plex later and pay off part of the new 3plex loan.
Give us more info but this is my 2 cents worth
Thank you all for your input, I truly do appreciate it.
Myfrogger:
I do want to sell the 3-plex AND my other home I rent out because of management concerns. I only want to manage a 3-plex for the rest of my life. You said that any bank will lend with that scenario, but don't forget, I do not work. Is that still true?
Hibby67:
I don't know what a wraparound is but isnt that seller financing? I have inquired and the seller isn't interested in financing.
Omega1:
I don't think Im over leveraged (I think). I own FREE AND CLEAR a $140K house and a $140K 3-unit. Then I have a HELOC on my $165K home I live in. Don't forget, I get over $20,000 in rents annually with no mortgages to pay (save my home). Lastly, fortunately, I am fully versed in construction, plumbing, HVAC, and electric ...I'm VERY fortunate to not have to worry about expensive issues with my properties.
Now, is a "bridge loan" somethign you need a jhob to qualify for? Cuz I don't have one . I think I know what it is, but would they give me one just by pledging one or more of my properties (that are now free and clear)?
Tinman1755:
I thought of the no-doc loan. But I have one question: If I get one for $110,000 and take out $80,000 from my credit cards to make up the $190K price, will that $80,000 need to be verified somehow before the loan is commited to me? I ask because pulling $80K of of CCs isn't something theyd wanna see, right?
Again, I am selling my 3-unit and house that I rent out (both free and clear) and I made an offer on the 190K 3-unit I want. I need some loan where it will be temporary so when I sell the 3-unit and house, I will pay the loan off. I feel they will be sold within 6 months. If I had my choice, I'd love to have a Mtg for $110,000 on the new 3-unit and then I would have no other debt (after selling the other 2).
One last thing: Is there a such thing as a HELOC for a non-owner occupied?
Thanks again everyone!! You are fantastic!
P.S.
Please don't turn me in, but in the past, I have got 2 different HELOCs with no job. I just stated my old job and they must have never verified it.
That's why I thought of the HELOC.
Thank you.
i think that you can use your rental income as income if the income is high enough in relation to your dedt to income. which it sounds like DTI is in line. that has been my experiance.
Quote:
On 2004-02-25 01:48, guru wrote:
i think that you can use your rental income as income if the income is high enough in relation to your dedt to income. which it sounds like DTI is in line. that has been my experiance.
You are absolutely correct!!!!! Some banks will take 75% of the gross rental inome and some take 100%
Lori
If your net income is 20k of passive rental income then in the banks eyes you technically do have a job. Others correct me if I'm wrong.
By the way: I don't think you are even close to being over levraged. If the cash flow covered the 3 rental then I would keep all three.[ Edited by scr2001 on Date 02/25/2004 ]
hmmmm...I only know one Tony from Grantville that doesn't work, has his places paid off, and is well versed in HVAC, Electrical, Etc...
Tony, I wouldnt get rid of your other places, keep them and rent them, if theres management/tenant problems, find out the source and fix it. Otherwise the problem may pop-up again with the new triplex.
I think you should flip another deal and make 30k + off it. That took you what... 3 weeks??? I know, I know... you don't have that much time. I'm gonna give you a call tonight to catch up. Or you can PM me....as soon as you figure out who this is.
You could do a hard money loan at 50% of value on both 3 plexes with no job or credit The rates and points are a bit high but if just short tern it would not be so bad. I use them cause i hate filing out applications and proving income etc. Fast and easy but not 4%. I am paying 15% but only for a few months and that is my deal
Good LUCK and Thank You
Hope this helps some
Ted Jr
Thanks to everyone for your messgaes.
I did get the HELOC for 4%. The other 125,000 is coming off cerdit cards and will be repaid within 5 months easily.
Thanks again!