Financing Question

Hi Everyone!

What are the odds of getting a mortgage on a property for around 60% of appraised value if the borrowers credit is bad? Does the fact that it will be an investment property affect the decision any?

The situation I’m thinking of would be to find a seller that has a small mortgage. Obtain a new firstmortgage to pay off their existing mortgage and possibly give them some cash at closing. Then ask them to carry back their remaining equity in a second position.

I’ve heard of this being done, but I don’t know the viability of doing this when my current credit has gone to hell.

Thank you all for your time. For reading this and for posting the great informational posts that you all do. This site is a great resource. I hope to be able to contribute to it as well.


Every single type of loan whether it's Hard Money, Private Money or a Conventional type of loan requires a down payment! If your a US Military Veteran you can qualify for VA financing which will loan 100%! If you have over a 660 to 680 Fico mid score you may qualify for an FHA Loan with 3.5% down plus closing cost's.

I have heard of some Hard Money lenders willing in a few growing area’s of our country willing to loan 100% of purchase but requiring your good credit, a personal guarantee, and an experienced investor with a proveable track record.

Hard Money, Private Money and Conventional Financing require 20% down now minimum! Now 7 years ago you might have been able to get a purchase money 2nd which would allow you to finance 10 to 15% of the down as a second Trust Deed.

Whether that money is available in your area depends on the market but it requires a 700 to 720 Fico mid score for this purchase money 2nd Trust Deed!

The long and short is reguardless of how much you pay LTV you will need a down payment for the loan!

You have to have skin in the game!


Hey GR!

Thank you very much for reply. I’m sure that there are lots of people posting questions asking how to invest without putting anything down. Please, let me clarify, I am not opposed to having “skin in the game.” I just moved and recently purchased a home so most of my money is tied up at the moment.

Also, just to be clear, you’re saying that, in your opinion, without good credit and a hefty down payment, this strategy will not work?

Again, thank you so much for your time and ideas. They mean a great deal to me. :biggrin


Start looking at wholesaling! It takes little cash, you can assign or use transactional funding to get paid, and can probable do your first deal in a couple of months!


Hey GR,

Yes, I am open to all types of investing. If it’s not quite available to me in my current situation, I will store it away until I can.

Basically, I see myself as somewhat of a problem solver for the sellers and eventual end-users that I work with. However, I’m not naive enough to think I can help everyone nor will I allow myself to get put into a precarious position. I realze that in order to help anyone, I first need to be in a safe position myself.

That is actually why I feel so fortunate to find this forum. Seriously, from the bottom of my heart and the depths of my soul, I thank you and everyone that posts here with their ideas and insights, The kick in the @$$ to motivate and the slap up side the head to bring one back to reality.

Cheers! :beer

Currently my wife and i are saving to buy a house of our own and wanting to close in June of 2012. Shortly after that we want to start investing in Oct of that same year. By then we will have saved around $15,000. Is this enough to buy a good investment property or do I need to save more?

$15,000 will get you 3 homes in the hood/war zone in Atlanta, Georgia.

Depends on where you live. I can buy investment properties in my area from 15-30k that will rent from $500-650.