Need Strategy Advice
I need some advice here is my situation; I have done 3 rehabs before lived in the homes for two years each and did well. One was a 203K (I don’t plan to do that costly governmental paper work crap again…lol) Anyways; here is my stats and what I would like to do. I just got divorced and we sold the family home paid off all the debt and all is settled, I also won a lawsuit giving me $185K in cash (IRS has not been paid yet). I paid off $52K in debt and I am carrying $6K in debt on a 2.9% card with a $14K limit. My score by next month will be 720-745+ I currently have about $120K in a 4.5% money market after paying off the debt and settling with ex and buying a couple items. I need to earmark about $60K (or a bit less) for the IRS so until April 15, 2006 I have about $120K to work with. I am a self-employed general contractor and mostly do small jobs I would need to go stated income. I own about $40K in vehicles and tools. So I have $120K in cash, $40K is assets and less than $7K in debt and credit score shortly over 720.
I am the Seattle/Tacoma area the market is wild here and is insane deals are really rare and most are snapped up cash before they hit the market. So single-family flipping/rehab is tough. I am thinking of 4 plex’s in a buy and hold strategy about one every 3 months. I am renting right now and would be willing to move into one of the units.
I talked with a lender I have used in the past was “informed” that just in the last 60 days that most if not all “investor” properties will require at least 20-30% down same with doing a rehab and that most investor loans now carry a prepayment penalty. I would be able to do one 100% owner occupied property but I would have live in it for 12 months before I could do another and being stated income it will really tough to acquire more than one property in less than a 12 month period. Lenders will not be willing to lend when they see I have multiple mortgages and I am stated income. Is this correct?
With prices for 4 plex’s in the $280K-$450K range in this area a 20% down kills me on the cash and the same almost applies for single-family homes to flip or rehab with most homes over $200K. Now in reality I should be able to rehab two homes in the next 12 months and meet the FHA 6 month rule and have the cash to make it work. (I really don’t want to live in a rehab house again…been there done that..lol) But maybe I will buy a camping trailer and live in that!
I guess I am looking for a couple things…. some advice on what to buy multi vs. single vs. single rehab, how to buy without too much cash out of my pocket and what/where to be looking for in a lender to work with me.
Family member is currently self employed. So there is no company to worry about as this 401k was from a previous employer.