Having problems selling new construction due to the current sub prime market.
Current lender only offers construction financing. I could discount the homes 75% FMV and make a small profit, but I don’t think the spread is enough to attract cash investors.
The other option is to find conventional financing then rent to own and get a small profit up front.
My challenges are my corporation may not be strong enough to get conventional financing and for the 1st time in my adult life my personal credit is bad.
Part of the answer depends on a few of factors - for one, what is the state of your local market? If your are hit in the buyer’s market declining values type of market? he you options re more limited. If it is still reasonably healthy, then you have more options.
Second - what kind of corporation do you have? If it is an LLC or a fairly new corp then you probably would have to personally guarantee - which brings your credit into it.
Third - how bad is your credit? 620 used to be okay but now it is tough - but you can still get decent credit options if your score is 680 or above.
Things I would suggest as possible solutions:
Go check with the loan officer at a small local bank - not a behemouth like Citi or BofA. A lot of local banks still have lots of money available - and a lot of them are willing to do Subprime if the situation is right. Everybody got so used to the easy money Mortgage Brokers were selling the last few years that they completely forgot the traditional friend of the small builder-rehabber - the local bank. Again, the small city and regional banks mostly are doing very well. They never got involved in the “No Doc” lending fiasco of the last few years.
Get a tenant or tenant-buyer into the property - long term contract - and then go for financing. Lenders are more willing to lend on investment property that has a long-term tenant than one that is vacant and eating mortgage payments.
Get a tenant or tenant-buyer into the property on a long-term lease then advertise the property as a turn-key investment property. A lot of rehabbers are having success with this - set everything up so a new investor can walk in without having to advertise for a tenant. You’ll get a lot of new landlords willing to buy.
Get a partner, who can put their credit up to arrange the financing.
Anything you do, do it fast before you really become a motivated seller.