Question
I was told by several banks,or lender companies that when you buy a property you must live in it for 12 months,or have it for 12 monthes before you would be able to get another loan. Is this true? How are people able to buy so many properties in a short period of time? Cause not everyone just has money laying around,and those T.V. infromercials make it sound so easy. Am I missing something?
find a good hard money lender
What is a hml?,and what can they do for me?
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&articleid=283
Hard money is not necessary, or even appropriate advice based on what I think I saw in your original post. There's always owner financing, Sub2, Lease options. etc. You don't have to tie up your credit to purchase real estate.
Financing for your buyers may become an issue if they are using FHA Lenders and you haven't held title for 12 months when you sell.
If you have the credit, and financial resources necessary, you can qualify for several more properties as soon as you find them, using traditional financing as non-owner occupied purchases as well.
Good luck,
Jeff[ Edited by jeff12002 on Date 04/23/2004 ]
Is it hard to find someone that is owner financing their home? And do they mind if you turn around and owner finance it to someone else for more money?
They are out there. Not every homeowner will qualify for your investment strategy, so you probably wont be making offers on every house you see. Find out what the owner needs. Maybe 5 or 10K down, and they might agree to carry the balance.
With regards to you selling it with owner financing, you are now getting into a less likely scenario. You can sometimes negotiate the right to pass on there financing to a new buyer, with the guarantee that if your new buyer defaults that you will still be responsible, essentially guaranteeing the loan. If you intend to do this make sure that your seller understands this up front and is ok with it. If they don't agree to this, sell it the normal way, with your buyer bringing new financing to the table. If you get a good enough buy, you should be able to do this with little problem.
Quote:I was told by several banks,or lender companies that when you buy a property you must live in it for 12 months,or have it for 12 monthes before you would be able to get another loan. Is this true? How are people able to buy so many properties in a short period of time? Cause not everyone just has money laying around,and those T.V. infromercials make it sound so easy. Am I missing something?I would say that if this is what the banks are telling you, then you are asking the wrong question. This is the answer I would expect to receive if I am asking about an FHA (or a first-time buyer) loan.
Ask how many non-owner occupied loans (investment property loans) you can get from the lender and you will most likely get a different answer. Some lenders will tell you 4, others will tell you 10, while even others will say as many as you can afford with no specific limit.
How can I find a HML?
put the words "hard money lender" in a Yahoo search[ Edited by heyshid on Date 04/23/2004 ]
slamtam,
Hard money is going to cost you big time. Most would advise using this as a source for a short time need on a property that has a large margin between your cost, and what you plan to sell or refinance for. Your hard money lenders will likely limit your available amount of capital to 60 to 70% of FMV. It will cost you in the range of 5-7 points to get the money, and interest rates of 12-15%.
Investors that use hard money generally use it for those deals that they can get at a deep discount either because they need extensive rehab work, or there is a need for cash to close in a few days versus a few weeks from a traditional lender. They then sell or refinance as quickly as they are able to keep the high interest rates from swallowing all of their profits.
Hard Money Lenders definately have their place in our business, and I'm not trying to discourage you from using them. But I encourage you to use them properly, and for the right reasons. They are not appropriate for every occasion that you will encounter.
Jeff
Thank-you jeff for all your help.