An offer accepted on a good deal,no financing. - Posted by Randy

Posted by Russ Sims on August 19, 2004 at 13:56:45:

If you haven’t already, you may want to post this on the financing forum. I recently purchased an investment home and got 100% financing. Zero down, zero out of pocket. I gave the seller 3% more than the negotiated purchase price so he could cover my closing costs. My mortgage broker found me a 80% first loan, interest only payments with a rate of 6% (it’s an A.R.M.) The same lender (SIB…Statin Island Bank)gave me a 20% second mortgage, fully amortized at 9%. The property barely cash flows. But in a year I’ll refinance it at 70% loan to value and I hope to get an interest only loan at a rate of 5% or lower. Then the property will cash flow like crazy.

If you find a good property in a good area and if you are able to buy it right, I have no problem breaking even on the cash flow. I know that within a year I’ll be able to refi and dramtically reduce my monthly payment.

To get the kind of zero down financing I mentioned above, you really need good credit, with a bare minimum FICO score of 680…at least this has been my experience.

All mortgage brokers talk a good talk. Very few of them can deliver. Try to get referrals from other investors. Who do they use? It’s extremely important to find a good broker/banker. I’ve been known to call my broker up from the house I’m buying, to ask him the best way to write up the sales agreement. Get it written up right so you won’t have to chase the seller down for any changes your broker may require. In other words, get all your financing ducks in a row before you write it up. Then you’ll know what’s realistic and it so much easier.
Russ

An offer accepted on a good deal,no financing. - Posted by Randy

Posted by Randy on August 19, 2004 at 12:29:11:

I have an offer accepted for 104,000.00 it is a condo,there is a tenant already living there and will remain there after I own it,the tenant is there through section 8 the rent is 750.00 a month,Is there anyone out there that can back me on the financing interest only loan,or is this thing about find the property and you will get the financing a bunch of garbage this is a property in a growing area everything you need is blocks away close to the highway,I have tried many mortgage brokers and have preapproval letters but the interest rate is to high at 9% to work for this deal to at least break even,it has been my experience that most mortgage brokers are the same in what they will or will not do,is there someone out there that would assist me in this,with out the same story?