First things first, I am unemployed at the present time and have been for a couple of months. Previously I was employed for 8 years at one company, laid off, unemployed for 5 months and then worked for 3 months before finding myself unemployed once again. I have a credit score of exactly 700.
I’m curious (for those that have experience) if I could qualify to buy a property through conventional means (with a very low downpayment)? Otherwise, hard lenders seem to only offer 65-70% LTV. Currently I’m looking at a couple of properties that will rent out at $400-500 their current mortgage and taxes. I would like to purchase at least one of the properties if it would not kill my credit score in attempting to qualify through conventional means. Anyone with experience in this?
Without employment you are going to want to go “No Doc”.
I’ve got a 90% No Doc program. Min. 680 FICO. If the property cash flows 6 months PITI reserves are required (410K, IRA, etc) if the property has negative cash flow 12 months PITI reserves are required.
This programs is not for investors with more than 2 or 3 properties.
Thank you. I’ve got a pre-qualification letter for 65% from a hard money lender but this was my first look at an opportunity to purchase a multi-family property. The current owner will not finance but (I’m not sure if I stated this correctly in my first post) the property will have a positive cash flow of around $400 or $500 after mortgage, interest, and insurance. I’m just trying to find a way to make this deal work in my current unemployed state.
Heck, if I find a bunch of these then I wouldn’t need standard employment!!!
Jason, I am scheduled to start work on November 21st. Unfortunately after being in the large corporation corporate world and doing a highly technical job, I find that my qualifications do not transfer to the outside world. Meaning I will make about 60% of what I used to make. After having health problems that were a direct result of the last job (sitting too much), I am bound and determined to find a way out of the desk job situation. Yes, I will work for a short while and use that to my advantage. I will acquire a number of rental properties as well as rehab properties to bring in cash. I’m new to this but I was new to lifting weights before I decided to go full tilt and ended up breaking a world record in the bench press (at my age and weight). Having said that, nothing stops me. Nothing. I always find a way.
Several lenders offer the 95% CLTV on no-doc investment properties with a 680 score. I don’t encounter many properties that don’t cash flow from an appraisers perspective, however the primary lender that does 95% CLTV’s guideline is:
Negative cash flow is the monthly rent minus expenses as evidenced by the FNMA 216 Form. If expenses are outlined on Form 216 and deemed reasonable by UW due to net rent figure, do not apply a standard 25% maintenance and vacancy factor. If unreasonable, use 25% maintenance and vacancy factor.