Hello Mary
As long as you are buying the properties from the homeowner their reason for selling is not the Lenders’ business. I mean, the seller could be selling because he is moving to the mountains, the beach or Nyalgunga.
I have yet to see a 1003 that requires the seller’s reason for selling; so don’t look for lenders who finance a particular situation. In doing that you limit yourself. It is you, the borrower, that the Lenders are concerned about: your credit, the collateral and your capacity to repay the loan (the 3 Cs).
Mary, you have obviously carved a nice little niche for yourself in which you can do very well if you had additional or unlimited financial resources.
My two cents worth:
Find a small local Bank and start developing a relationship with a view to obtaining a Working Line of Credit that you can use to purchase the property, fix it and once you sell you pay the money back into your Line of Credit so that you can use it for the next couple of deals. Of course when you offer to pay cash and close in two days (to give yourself time to do the title work) you should get an even better discount.
Buy several properties and quickly flip them to other investors for some quick cash to build up some cash reserves.
Buy and instead of worrying about fix-up funds lease option to homebuyers and take the down payment part cash and part sweat equity and that should give you some cash upfront and some cashflow, reduce your turn around time and eliminate the need for fix-up funds
A member of our REI club does the kind of loans you are looking for but they start at $100000. When you have a moment do email me and I will share what I know for lower amounts but no less than $75K for the total funds (the very small loans are not popular because they take the same amount of time and effort to put together as do the larger ones and earn them considerably less)
Look out for the next Lenders’ Seminar hosted by Ed Garcia and Terry, and attend it. It will take years off your learning curve
You’ve got it made Mary, so go do it on a big scale and remember to post your success story here.
need money to get houses out of foreclosure - Posted by Mary Omolo
Posted by Mary Omolo on July 11, 2001 at 10:15:51:
Hello My name is Mary and I live in, Texas. I often work the pre-foreclosures and buy the houses directly from the homeowners before it gets to the court house steps. However, most of the time I run out of money after one deal is done and then run out of repair money to boot!! The houses often have good equity in them. Most of these houses need at least $10,000 to bring them current and stop foreclosure and minor repairs. I once read of a company that will give you money to get the houses out of foreclosure before the sale, but will not give you money to go to the auction. Does anybody have that information? Any leads will greatly be appreciated
Mary,
I have been doing the samething here in Tennessee. Let me tell you my way. Go to the courthouse and get yourself a DBA(Doing Business As) for a construction business. This way you can write your own estimatements for the repairs. Write the estimate for 2 or 3 times the amount of what the actual repairs will cost. Then go to the bank that is foreclosing on the owners. Ask to talk to the VP of lending. Do not talk to anyone in a lower position than VP because the VP can make quicker decisions. Tell the VP you want to buy the property and you want his bank to finance the deal. He will bow down and kiss you feet for helping his bank out like this. After he quits thanking you tell him you want a construstion or rehabilitation loan or what the banks in Texas call them. You want a 6 month interest only loan to give you time to fixup the property and sell it.
OK now you wrote the estimate for more so that you have the money to cover the interest and to have money in the bank becoming seasoned. The money you took out as loan money is also not taxed because it is a loan.
I know this sounds too good, but I have done 4 deals just like this in the past year. Actually 8 months which is how long I have been a realestate investor. I have not paid anything done on any of the deals and have not paid for any interest or any fixup it is a completely free house and free profit. What is the return if you pay nothing and get something back anyway. I hope this helps and good luck.
Nick
