Financing questions

Hello, I am new to this entire idea, I am just looking into feasability. I would like to buy a house to rehab and then sell for a profit. I own a house and plan on keeping it. I have good credit, but not excellent. I have very little savings and no extra cash. In fact, the main reason I am looking into this is to pay down my credit card debt, which I consider significant.

Could I even get another mortgage? I think I could do rehab with my available credit, if I couldn’t get a construction loan or rehab loan. Am I looking at this backwards? Should I concentrate on paying off my debt, which will take in excess of five years at my current rate, and then save some money to get started? Any advice is appreciated.

Another thought. MY husband’s best friend is a mortgage broker who underwrote our current home loan and immediately sold it to ABN AMRO. I am currently trying to get an idea before asking him about mortgage options. Is there an added benefit to having a friend in the business, like could he underwrite where a standard broker would say no or are there guidelines he would be bound by? He probably could underwrite a loan himself, but is there any point in asking or would he probably say it is a bad idea based on our debt to credit ratio etc…

If your credit is poor and you are having trouble getting financed, I alway used a hard money lender. Couple of reasons; 1) If you are getting a good deal on a fix and flip you will be able to find a hard money lender that will finance the purchase and the fix up costs. HMLs will typically loan 65%-75% of After Repaired Value (ARV), so if you are purchasing it for ~60% of ARV you will have some money for fixups. 2) When you apply for a loan with the hard money lender (HML), you will have an experienced person looking at the deal that (if they are reputable) will not lend the money unless it is a workable and profitable deal for all. Also, some true HMLs will not check credit or report it as a liabilty on your credit.
Hope this helps, let the people on this board know if you need to bounce a deal off some experienced people.