OfflineHappy New Year REI Professionals,
Hope everyone is doing well. I currently live in the Palm Springs Area, Riverside County, California, where properties are still cheap. I'm looking to purchase an REO for myself because I'm tired to pay rent! Here is the info:
* REO Property
* Fixer
* 3/2
* 1,500 SQFT
* 5 acres
* Swimming pool
* Fireplace
* Additional 1,000 SQFT that needs finish
* Purchase price: 65K all CASH, "as is"
* Approx Current Value: 165K, "as is"
Here is my sitation:
* Low credit score due excesive medical bills. I do not qualify for a Conventional Mortgage.
* First Time Homebuyer.
* Do not have money for a down payment.
Since I need to be creative, I figure more experienced people in RE can give me some advise. Private Mortgage Cos and Hard Money Lenders are one option. Also, how long can I refinance after Private Mortgage, Hard Money Lender, and Conventional Mortgage? This property is for me to live in as my primary residence.
Any feedback would be greatly appreciate it. Thanks in advance and have a great day!
Blessings
Christian B. O'Laarte
B.S., Business - CLU - 2005
good to see you on here. BTW I just wholesaled a deal in Indio se we are wholesaling/buying out there again so send me what you have ok. In regards to your question do you have anyone that will buy the hm with you? Any family? Or a friend?
That is the only way I see for buying the hm without $ or credit. I am in the same boat as you=not enough $ yet or credit to buy a place-would love to buy a place but until I hve both $ & credit I wont. Prob in a yr or so I will be in a position to buy. Anyways happy new year & send me more deals ok! thanks.
Tony
Go faster do more! GFDM!
That sounds like a very good deal! I have used hard money loans for Fix N Flips and you have to really check out their criteria. Most of them will not loan to owner occupants. I don't know all the banking rules, but all the regulations change when the loan is for an owner occupant, so they usually only loan to investors looking to flip a property that will not live in the property. And you still have to have a down payment.
The other type of loan would be if you could find some "private money" willing to loan you for a period of time until you can fix your credit and refinance. I have a lender (in AZ only) who gave me a 3 year loan on a rental property, so sometimes you will find loans like that, but you'll have to be up front about living in the home.
I just thought of one more idea. If you can get the property under contract, make a lease up for you to live in the house, and have papers for an Option to Purchase.... then you can wholesale the deal to an investor who must honor your contracts. That is, let you live in the house as a tenant, and in a couple years time you buy it back from the investor. You are creating a Lease Option for yourself. You will have to let the investor make some money on it though, for it to work.
Well, it's just an idea.
That is the only way I see for buying the hm without $ or credit. I am in the same boat as you=not enough $ yet or credit to buy a place-would love to buy a place but until I hve both $ & credit I wont. Prob in a yr or so I will be in a position to buy. Anyways happy new year & send me more deals ok! thanks.
Hello Tony,
Happy New Year! Good to hear that you are doing business in the PS Area again. I had to put a hold on REI due to medical reasons and due to a passing of a family member. Thanks for your feedback and for giving me more hope! I'm looking at different ways in how I can purchase my first home. I will be e-mailing you for more REI Properties. Thanks again and take care!
Blessings,
Christian B. O'Laarte
B.S., Business - CLU - 2005
The other type of loan would be if you could find some "private money" willing to loan you for a period of time until you can fix your credit and refinance. I have a lender (in AZ only) who gave me a 3 year loan on a rental property, so sometimes you will find loans like that, but you'll have to be up front about living in the home.
I just thought of one more idea. If you can get the property under contract, make a lease up for you to live in the house, and have papers for an Option to Purchase.... then you can wholesale the deal to an investor who must honor your contracts. That is, let you live in the house as a tenant, and in a couple years time you buy it back from the investor. You are creating a Lease Option for yourself. You will have to let the investor make some money on it though, for it to work.
Well, it's just an idea.
Hello mbjoseph,
Happy New Year! Thank you so much for taking the time in thinking and responding to my post. I really appreciate it. I'm so glad that I joined DG. REI is basically a science. Many different ways to work around it, so you can achieve a result. Thanks again and have a great weekend!
Blessings,
Christian B. O'Laarte
B.S., Business - CLU - 2005
Many people would like to invest in real estate but either they do not have enough money for a down payment or they do not want to lock their cash into a property purchase. It is possible to buy property with no money down. Not all of these methods will work for every transaction or with every lender.
1. Roll the down payment into the purchase price. Depending on your credit rating and lending history, some lenders will allow you to finance 100% of the purchase price. This will cause the interest rate and your payments to much higher than if you put money down. But, if you intend to sell the property quickly, it shouldn't have much of an effect on your profit margin.
2. Negotiate a separate installment plan for the down payment. Sometimes the seller will allow you to pay the down payment on a monthly basis.
3. Trade something other than cash. This could include land, a car, a boat, jewelry or valuable collectibles. Find out what they want and need. Maybe you have, or can get, just what they are looking for. You could also trade services such as carpentry, auto mechanics, painting, dental work and other services that you can do for the seller over time.
4. Get the seller to transfer their mortgage to you. This is a common occurrence in foreclosures where the homeowner is eager to sell and is willing to work with the buyer. You can do the deal as an assignment of contract and efficiently close the sale.
5. Apply for a loan assistance program. Talk to your bank, many lending institutions offer programs that allow buyers to put little to no money down on real estate purchases.
6. Find an investment partner. Look for an investment partner who will put up some or all of the cash in an equity-sharing partnership. You make the monthly payments and the two of you split the eventual resale profits.
7. Find a property to rent-to-own or lease with an option to buy. If you have a lease-option for 5 years, at the end of that time, you will need to purchase the house and can get a bank loan then. Meanwhile, you can use the time to fix your credit and/or save for a down payment. Some contracts may put some or all of the rental amount towards the down payment.
8. Get owner financing or a land contract. Another option is to have the seller act as the bank. You make your payments, including interest, directly to the seller. Then after usually 3 to 5 years you make a lump sum payment to the seller. During this time, you should have enough equity to qualify for a standard bank loan.