entry in to rei

Credit score 800, approx $25G equity in primary, a trust in wife’s name for $125G ( I will not take money out for REI).

Income to debt not the best…due to student loans.

What is my best entry into purchasing a sfh in the price range of $40G?

If you want to buy a house in the $40G range, what is the house worth? That will determine if you should buy it or not. If you should buy it how you should buy it also depends on the value of the house.

For example if you are buying a house for $40G that is worth $40G you are buying a retail house and you should put down 10% plus closing costs and buy the house.

In a scenario like that…with the current market, how willing would the bank be to lend money with loads of debt? Even though he has good credit and money in a trust?

I have found that as of today you can get loans of 70% loan to value of the After Repaired Value (AFV) of the house.

You have to get a deal or you will just be paying retail and you are not really in the business. In this business we have to buy at a steep discount compared to retail. There are still loans offered today that will loan you all the money to buy and fix up the house as long as the loan to ARF is below 70%. If you find a house with an ARV of $100k and you can buy it for $50k, put $10k into bringing it to market condition and $10k closing and associated costs you will end up with essentially a 100% loan.

If that same house with an ARV of $100k takes $10k to fix up you will need to bring $10k of your own money to do the deal.

To piggyback off what Bluemoon said, exactly what specifically are you trying to accomplish? What will you do with this house?

Ideal situation is that I start off as a landlord to create cash flow. Eventually, acquire several homes to rent and from that point, who knows.

Sorry…I didn’t see that there was a new post.

I had to switch user names…johnooch is my old user name.

I see. I’d suggest you learn how to acquire said properties using either seller financing or a strategy called “subject-to.” This means you will obtain ownership of the properties but the existing loan stays in the seller’s name. That way you won’t have to worry about things like mortgage qualifying, large down payments, having too many loans in your name, etc.

Send yellow letters to a list of homeowners that meet your price range criteria that live in the areas you wish to buy, then sift & sort as they call. Preforeclosures or pre-NODs would be ideal…they have built-in motivation to sell subject-to.

You’ll want to pick up a good course on this strategy and learn it well before beginning to market.

Thanks NSU!

Is it typical that after an owner has signed over, that they actually remain in the home and pay rent? Or is it the home owner’s priority to save what they can of their own credit by not defaulting on the mortgage?


It is not customary for the previous owner to remain in the house paying rent. Especially if you want to give them the option to buy it back. I’d stay out of that business. Most of the time they just want out.

Good luck!

This is not 100% true but in general if they aren’t paying the bank they won’t pay you.

Yeah that definitely makes sense. Need to get them out of the house. So their remaining motivation is to save their credit correct?

My wife tells me this all the time. If they will stare down some big bank like Chase without blinking, what do you think they will do to some little guy like you?

Their main motivation will probably be debt relief, not saving their credit. Actually if they’ll sell sub-to by the time you get to them their credit is probably already shot. They probably won’t sell sub-to if they’re concerned about their credit (because they’ll be entrusting their mortgage payment to you, a stranger). But don’t think they won’t do it…it happens every single day.