cmacone and Mdhaas

I have read many posts here and I appreciate everyones input. From reading it seems cmacone and Mdhaas have this subject covered, however, anyone else that can help me, THANKS. Just wanted to get my personal situation out there to make sure i get started with the right financing. ;D

My situation is that I have recently moved to Little Rock, Arkansas. Renting with no job. I have very little extra cash to get started ($1000). I am looking to do rehab flips. My credit score is about 610 and I am looking at houses with ARV of 70k to 150k. What could I expect to be my best financing options? HML or could I and should I do traditional. Considering I will need extra money for closing or a down.

Tell me if you need more info. Thanks.


Howdy Readytolearn:

A score of 610 is a whole lot better than mine but probably not good enough to get a line of credit at a local bank. Perhaps you should use hard money loans on a few deals until you can get some cash and raise the scores. Bank rates are better than half that of HML’s. Private investors are gosh awful hard to find especially starting out. I am offering 36% interest and getting hardly any response from the signature ad or the ad in the classified. This is on a second mortgage but still a great rate. Keep in mind that because of the points and interest rate and low LTV you will have to find super deals to be successful. A marginal deal will just not work. You can find HML’s that will work with the cash you have for the deal. The first question all ask is how much skin do you have to put in to the deal. I like the answer thousands. My HML like 5% but has worked with less. You will get credit too for taxes that will not be due until Jan 2006. You may need to hit a few pawn shops but get a deal together ASAP.

I only have about $1000 cash for starting capital. I do have credit cards with about $9000 opened up for use. Instead of actually taking out cash on the cards could I just use the cards to fund rehab and keep rehab money as cash for other reasons (better rate on purchase than cash advance plus cards will only give about half of credit line as cash)?

I am a newbie and have been reading over the tons of great information on this site. This site is great.

I noticed your subject line “Re:cmacone and Mdhaas” and have seen them post quite frequently on this site. It appears that they have some pretty good information. Are they posting erroneous information or something?

Just thought I would ask.

Hello Everyone, First I would like to give you some info on HML. They base their lending on the project more than your credit. Your credit score is good for traditional. But with this in mind, HML also ask for cash available, equity in other projects (or your personal home), or collateral to secure the loan.
Now, I know that Mdhaas (Mark) will agree with me that you should always go with a traditional lender first and use a HML as a last resort. Because the fees and interest rates are higher. Also, $1000 is not going to get you very far. I would build up more capital. This may mean getting a job, which of course you will need to get a loan.
To help the newbies: continue to do your research, build your capital, keep a steady income, and do your “due diligence” when researching a deals. We (the postings) are here to help you.

I wanted them to help with my question is why I put them in the subject line. I have read many of their posts and found them very helpful. Thank you for the reply Chris, I do have my resume out and am looking. Also, I will be trying to build capital as much as I can, in the meantime, I have a few private investors who may be willing to help on the right deal. Thanks.


My ears were burning…was someone talking about me? ???

cmacone sums it up nicely.

Also, $1000 is not going to get you very far. I would build up more capital. This may mean getting a job, which of course you will need to get a loan.

There are loans for situations like yours but the rates will be astronomical and the parameters will not be as enticing as those when you can go full doc. Get yourself set up for a win-win.

Hello Jason, Good Luck on your projects. I’m here if you need me.

Thanks Chris, Mark, and Ted. Mark, if your ears were burning it may have been me, just good stuff though. Not sure why someone thought I was being negative in my posts. You guys have been helpful and I will continue reading as much as possible and I am sure I will have more questions soon. THANKS AGAIN. :dance: