Posted by Paul Macdonald on November 09, 2000 at 14:36:24:
With good credit get a NO DOC or a NO RATIO cash out loan. Up to 90% available. Find a good broker/banker and tell them thats what you want. You don’t even mention what you earn vs. what you owe.
I am a newbie to this forum (about 1 week) and am finding it so interesting my hours of sleep have decreased to about 4 a night! Over the last several years I have “dabbled” in real estate investing and had a few successes…but have now decided to get really serious! I have an immediate opportunity to purchase a bank owned(out of state bank and they are a hard nosed bunch!) property for $29,000. The property needs an accurately estimated $10,000 worth of fix-up. After fix-up appraised value is $55,000. We have A credit but very high debt-to-income because of previous unpaid business expenses and are not able at this time to obtain conventional investment financing. We own our own home with approx. $60,000 equity. What I would like to do is this: Borrow $39,000 for purchase and fix-up by using $30,000 of my personal home equity added to the after fix-up appraised value of $55,000 for a total value of $85,000. Question: Are there any hard money lenders who may make this type loan - actually less than 50% LTV - at let’s say 15% and as many as 10 points? Or are there other ways I should pursue financing?
Posted by Dave T on November 05, 2000 at 22:29:00:
Have you explored a conventional home equity loan? A hard money loan at a 15% interest rate and 10 points sure eats up your profit quickly. Your holding/carrying costs may eat up whatever profit is left.
You don’t say what you want to do with this property. Would you consider just purchasing for $29K, then assigning your contract to another investor for $1000 or perhaps $1500? This way, you don’t use any of your own money to make a small profit on this deal. You avoid the hard-money lending rates and points entirely.
Posted by Ron (VA) on November 06, 2000 at 12:57:18:
Paul,
Thanks a lot for the follow-up and your comments. A refinance is pretty much a “no-go” right now because of our high debt-to-income, even though our credit is excellent. If you would e-mail me your list of lenders, both conventional as well as hard money, I’d sure appreciate it. Thanks again.