Hello,
I have been trying to invest in a property but the banks wont deal because I do have 2 yrs of work history. I know there are hard money lenders to assist but I am in IT and its always contract work. Please anyone can advise on how do I get started i would really appreciate it. Property investment has always been my true passion just hard to get into it.
I don’t understand what you’re problem is.
If you know about HML’s then what does your employment record have to do with anything?
The HML’s making the loan on the property, not you, or they should be. That is, unless you’re working with the wrong HML.
Meantime, the HML will loan what they’re gonna loan, and you’ve got to figure out how to come up with the balance, if they won’t fund the purchase and the rehab.
There should be different repayment options available; monthly, quarterly, annually. Of course, you pay off the loan and the accrued payments upon sale of the property.
Find an HML that will fund both the purchase and the rehab, if you can.
Otherwise, you need to find a partner with the cash you need, to cover what the HML won’t. Finding the partner might be hard, but that will give you practical experience in selling a project to a potential investor.
One way you might pitch a deal, is to frame it as a split of “x” thousand dollars in “x” months.
In fact, I’ve used a variation of this myself. I advertised:
"Partner Wanted To
Split $300,000 Profits
On Multifamily Investment
I got several investor/partner wanna-bies, with 2 or 3 hundred thousand to invest.
Advertise for what you want on craigslist and be patient.
You don’t want out-of-state investor/partners. That’s just a fraud prosecution in the making. Just saying.
Hope that helps.
The problem with HML is that (1) their interest rates are higher and (2) they are often short term loans which would require you to refinance.
For the present, look into rent to own, subject 2 or land contract purchases. This does not require bank financing and does establish a record of steady payments will only strengthen your position when you come for a loan.
Another trick of the trade is to save for a large down payment. 20% is the conventional amount. When you have 2 years of tax returns, then you shouldn’t have a problem at all.
Why don’t you provide more specifics with what you are trying to buy? Cost of building, your downpayment, type of units, vacancy rate of building and area, revenue/expenses of the building. There’s probably a good reason lenders are turning you down and I doubt it has anything to do with you personally unless you’re just really bad at inspiring confidence and trust with your lenders in you.