Please help a beginner !
My wife and I are beginner in foreclosure bussiness and we need advice in financing. What options do we have to finance a foreclosure deal? Would bank lend money for forclosure house? Is there any other way to find money(beside looking for partners, I've have tried and failed)? We don't have much cash. We probably able to get a conventional bank moratgage for $250.000 with 10% down. Thank you very much for any help.
I recommend that ALL beginners prepare a business plan. What are you trying to accomplish in the "foreclosure business?"
If it is your objective to purchase real estate, how long do you intend to keep it? Will you lease it out? Will you rehab & flip?
Line up your financing in advance. At least know your capabilities so you don't waste time with deals that aren't financially feasible for you.
Write a plan that makes sense for you. Stick to it. My Dad told me that without a plan, not only do you not know where you are going... but you won't know when you've gotten there.
gng,
Don't take this as being snippy, but if you've heard the adage "if you find a deal, you can find the money", know that it's true.
I have a question for you. Why do you want to start with foreclosures? By this, I assume you mean buying at the sale, not before and not after, correct? If so, this is a dangerous way to start in this biz. There are many, many details associated with this type of purchase that can slam you with some hard lessons.
Because of the above statement, I've not seen any institutional money that's willing to lend for purchase at the sale. It's too risky in most cases. There may be some out there, but I've been told "no" on numerous occasions.
hope it helps...
[addsig]
Thank you very much Trandle and Theshortsalepro for all the helpful advices. I have done two house rehabs last year before that I worked for a Japanses copamy. Since I was working full time fixing the house myself and using too much time in the fixing period. I ended up making less money last year compare to what I maked in my previous jobs. (My brother in law always discouaging me in a very unfriendly way by saying that if not luck I could have lost all my investments) I love to make a house look petty. I would took down bearing wall and replace it with a beam in order to make a room look bigger. I would not settle for a simple opening to a living room, I would spend time to make a arch opening. In fact most of the people come to the finish products love it. The down side is it takes too long and eats up my profits. The followings are the list of mistakes that I made in my investments:
1) brought house in retail price
2) investment return depend on home price inflation.
3) didn't use a real estate agent
To try to solve mistake 1 and 2. I decided to look into foreclosure. I have read five books with some good advices but lack of (detail) information in financing and prossble lien issus. I have spend time in record department to try to learn title search, after I started to get a hand of it and someboby told me the record department may not have all the current records regarded to all the lien informations the particular property may carry. I don't know what to do to 100% protect myselt. Can I learn it from books or go to classes. Did law school offer training in this area? I will do whatever it take to know more.
Again thank you very much Trabdle and Salepro for all the advices. I will keep it in mind.
You're doing good ~ at least you've jumped in there and found the property. Try a hard money lender -- the interest rate will be higher but they will definitely give you the loan and so then you flip it so fast that the interest rate doesn't even bother you
Set up a strategy/plan for any scenerios that could come up and then take action.
Good Luck!
~Kristin
gng321,
You have made some very common mistakes. But you know that you made them and hopefully you will not make them again. Best of all you have let it stop you.
I recomend that you find a good mortgage broker who works with investors. If you have a Real Estate investing club GO. You will find lenders willing to work with you.
There are private investors with cash out there. You're just not looking hard enough. It's all about networking. If you don't know anybody with money...I'm sure somebody knows. Good Luck!!
GnG321
I do not know what state you are in but if you would disclose this information I may be of some assistance to you by directing you to a proper finance source .
The fact that you are trying to do a really good restyling of the house not so IkI as Shibui is Oishi.
If you will post your location I will do my best to supply you with the missing link.
Lucius