I am a 23 yr. student/hairstylist with very limited verifiable income. My credit score is low(600), however, i have very little debt. I live in an area of high foreclosures(single family units). Many of which I could purchase for less than 50% total after repair value.
For Example: asking price $11,90, ARV $50,950
asking price $18,500, ARV $72,700
asking price $18,900, ARV $66,900
Most need repairs totaling>$5,000 and some can be moved right in. I would like to purchase as rental units, and maybe sell them in a few years after our housing market picks back up( I’m in Dayton, OH).
I have been reading everything i can get my eyes on and I am stumped with all the options. Ideally, i’m thinking the best for my situation would be a NIV loan, but my credit score might be too low for that program. As you can see from my examples, the purchase price of the properties are less than $20,00-$30,000. Will that be a negative factor in obtaining a loan? What about an “umbrella” mortgage, packaging say 3 properties totaling $50,000 under 1 payment? (again thoes 3 might total $50,000 but apraise for $150,000+)
As you can see, im a newbie and i welcome any and all suggestion. Esp. if you’re an investor or broker who has completed similar deals successfuly.
Thanks a Million, MI$$Y!
Ideally, i'm thinking the best for my situation would be a NIV loan, but my credit score might be too low for that program.
If you are looking for high ltv loans then you are correct. NIV loans require higher credit scores and assets of some type.
As you can see from my examples, the purchase price of the properties are less than $20,00-$30,000. Will that be a negative factor in obtaining a loan?
Absolutely. Most Lenders have a minimum loan amount of 40-50k.
What about an "umbrella" mortgage, packaging say 3 properties totaling $50,000 under 1 payment? (again thoes 3 might total $50,000 but apraise for $150,000+)
This may pose difficult based on the personal parameters that you mentioned previously. Banks are very particular when it comes to investment properties and especially leary of tying them all into one loan.
You may want to seek out a financial partner for your first few deals to help you build up your assets and credit.
Well I am in your shoes. Im 23 and from springfield ohio. My goal is to get enough rental units with enough cash flow to support myself so I can quit my day job and then concentrate on flipping full time. My goal is to accomplish this in 2 years.
Unfortunatly. I am finding it is really tough to get started without a large amount of money (10k+). If your like me getting a loan will be tough so I suggest you start making friends and working on savings, credit score, and learning. Make a plan basically.
If you do not already own your own home you should start there. I would look for a place that could be a duplex or a 4 plex where you can get other people to pay your mortgage. This will give you some experience and it will help you learn. Try not to get more than you can afford if you don’t have a renter in the additional units.
Options that are available to you:
I am a Wholesaler with Wells Fargo on the Sub Prime and Alt A side. We are one of the few lenders that DO NOT have a minimum loan amount. Those loans could be accomplished with a 620 MID FICO SISA to 90% LTV.
Why is is cool for you?
No MI, NO PPP, 30yr fix rate is better than my arm and if you need to do a rate term refi we can do it without any seasoning on appraised value. Other lenders to look into on this matter
Green Point MTG
FREEMONT
Loan Link Financial
They do have min loan amounts, but they have terrific NOO programs.
Feel free to shoot me any questions in re Alt A lending practices.
ccrady