Hi everyone. Forgive me as I know this is a common question, but I’m new to this and have identified several REO’s that I believe can be profitable. I need a stated income loan with 6 month no pay, 12 month term, 65% ARV with 100% financing with closing/origination rolled in. 671 mid, high debt to income, recently became 100% commission salesman. Most lenders I’m talking to want anywhere from 6K to 10K in reserves. If I had that, I’d take out a standard loan and put 10% down and get much lower rates. But I’m trying to get started here. I plan on cash flowing the rehab with credit cards or perhaps private money secured with a second until the draws are approved. Does anyone have any experience with a program that could help me? Thanks.
Hello, It seems that your going to need some cash or equity or collateral to get started. Your first choice should always be to go with a traditional lender. A HML will loan based on your project and not your credit and up to 70%. But the terms are up to the lender and their criteria. And yes, their rates are higher. A HML is your last resort.
Thanks for the reply, but let me clarify. Yes there will be equity in the property purchased, thus the 65% ARV statement. No I can’t do a HELOC or similar, or believe me I wouldn’t even entertain using an HML. I lack cash/collateral which is why I’m looking at HML’s. And yes, I know they have higher rates. I guess what I’m looking for is specific lenders that people have experience with that will help in my situation. Thanks again.
Hello, I should also clarify. When I said equity, I meant in other properties. There will be upfront fees just like with a traditional lender. HML must have something tangable to “hold on” to so that it supports the loan. Sorry for the confusion.