How to get 100% financing when buying under value

General Real Estate Investing
1

Let’s say I get financing for a property worth $100,000. The actual purchase price is $70,000. Therefore, I would have $30k equity immediately.

The mortgage brokers/ banks I have talked to say they can give 90% financing off of the purchase price or the appriased value (Whichever is lower). Am I talking to the wrong banks?

On that same note, let’s say I buy a house worth $100k for $70k and it needs $10k in repairs. Is it likely to get financing for $80k right off the bat?

Thanks

2

Talk to small banks and lenders (portfolio lenders). Brokers normally originating loans for wholesale lenders, who sell their notes on the secondary market, who have very strict underwriting guidlines.

Hopefully as your career moves forward, you will outgrow your small community bank, but by then you’ll have plenty of money and a reputation to count on.

3

DannyTheGreat is right. What I did is went to my local real estate investors club meeting and in the handouts there are mortgage brokers that advertise there. The reason they advertise there is that they understand what we are doing. These guys will offer you 90% of after fix up value and roll in the repair costs right off the bat. You need to deal with people that are in your business not retail mortgage people. They have no idea what you are talking about.

4

Any idea if this strategy works in Canada? I am pretty sure we don’t have near as many small banks here. Anybody know if its still possible to get 100% financing when buying under value here?

Thanks in advance.