Need REI advice - have equity and good credit

I live in Southern California and I am thinking about investing in the SLC Utah housing market. I have excellent credit (FICA = 810) and almost $200K in equity in my current house.

I’d like to buy several properties in the $100K - $150K range, rent them out for a positive cash flow for anywhere from 1 - 5 years, and then sell and re-invest. I’ve looked at several banks and brokers in SLC and it looks like the majority want 20% down, but I’ve found a few that will do 10%.

The way I see it I can either cash out my equity and fund several myself, look for 0% down deals (but I still have to pay closing costs), look for owner financed deals (but again I still incurr closing costs).

I see a lot of ‘using OPM’ comments in this forum, but it seems like you still have to come up with some cash yourself. Am I missing something? Any advise on funding these deals given my good credit and equity would be appreciated.

For such good credit score like yours, it’s not new anymore that there are financial institution out there willing to lend you zero down. That also depend on the state. This is where great networking will payoff by knowing some mortgage broker who would go the extra mile to find you lenders who would even take no down deals. Of course, closing cost is an expense but if you could find such a bargain price for a house, closing cost would be a minimal cost as compared to your profit.

Howdy Grommitt:

I see lenders all over the place with ads for 100% financing with credit at 620. I just deleted a post last night that was advertising in the discussion forums. Maybe they placed an ad in the ad section. I believe it was Lonestar. I do not know the area they cover but a lot will do nation wide. Keep looking and you will find zero down deals.

If I can buy 31 units with $500 out of pocket with my horrible 500 or less scores you should be able to buy the whole state of Utah


Thanks tedgr and resylnn. I’ve been looking on the internet and found a few lenders that say they do 100% financing. I’ll look into these some more.

I’m still stuck on some fundamental issues though. It seems like after I purchase a property or two my front-end and back-end ratios will get to high for these lending institutions to continue to finance me. How do you get over that hurdle?

Tedjr, did you but 31 units (i.e. an apartment complex or something), or 31 different deals?

Howdy Grommitt:

It was a 31 unit apartment building that I bought using hard money for the majority of the purchase and fix up and some private investors for part of the required equity. I am about 50% complete with the rehab at present.

I found that the more deals I did the more the banks and S&L’s at the time liked it. I was adding to my ratios. Each property added cash flow figuring 75% income and with the debt load because of the low prices I was cash flowing at 50% collections. You may not be able to do the same. I actually did 9 different properties with the same lender and they wanted more deals to refinance. Some were duplexes and triplexes and a four plex.

Later: time for a pillow


have your local broker take you through Indymac Bank or Bayrock Mtg. they have good programs for someone like you, i.e. good scores, equity.

Good luck.


 Countrywide just did an 80/20 loan on a $120,000 loan in Las Vegas.  80% loan at 6.0% 5 year are and a 20% credit line starting at 6.5%.  Total payment pi come to $560/month.  The condo is appreciating $3000 a month thru the first 8 phazes since Nov 2004  builder close out.  
 I keep repeating in my mind LOCATION. LOCATION. LOCATION as well as never invest further than a couple hours from home.  I think Salt Lake is a stretch from Los Angeles, and I know an hour plane ride or a 2 hour car ride from LA you can find justas good a deal with better control

with scores like yours lenders would be begging to lend you money! No need to lien up against your primary to do so. 100% is available.

There are lenders who would do 100% financing for investors with your credit score.