Hello Everyone,
I hope that I’m posting in the right place, if not please direct me to where I need to be. Also, if my topic has been discussed before, please direct me to how I can find related topics.
I’m so new at this that the only property I own is the one I reside in. I’m a single mother in VA, and I’m striving for financial freedom, which I can’t achieve working for someone else.
Here goes:
After spending days on this site, I’ve decided that buying and holding (renting) seems to be the way to go right now. Agreed?
Here’s my situation. I have decent credit. I had my credit pulled last week and my middle score was 673. I pay my bills on time, but I don’t make lots of money, so I def need a stated income loan. And I don’t have any funds for repairs. I need everything financed in the loan. I was thinking going with the HML companies to purchase and rehab, then refi with a conventional loan (unless the HML will loan for terms between 24-36 months.) after rehabbing is complete. How does this sound?
I apologize for my terminology or lack there of. Like I said, I’m as new to this as you can get, but I’ve got to make some changes. I’m looking for any and all advice, suggestions, and help for the newest of new investor. I’m also interested in obtaining a mentor.
Oh, I’m also a licensed Real Estate Agent, but I do hold a full time job as well as a Part time job. It sucks, but I have to do it!!
Welcome tjnva. You plan sound like it will work. I generally use the same loan that you are talking about. I think the minimum credit score is 660 for that kind of loan you are ok there. But I don’t know about stated income loans anymore. In May I know you could get one. I am not sure about now.
My advice is that the worst time to go into business is when you need the income from that business. Real estate is a business. That being said make sure your lifestyle is secure on the money you are making right now before you start into this. Don’t think about buying a rent house with $200/month positive cash flow expecting to spend that $200 every month. That is a recipe for disaster.
I generally use the same loan that you are talking about. I think the minimum credit score is 660 for that kind of loan you are ok there.
Thanks for your speedy response. Which loan are you referencing? The HML or the refi?
So, what options are out there, if any, for investors with limited funds, yet pretty decent credit.
Yes, I maintain my currect lifestyle okay. But I will never get ahead. I make enough to live and do a few extra things, but that’s it. If my automobile broke today, I would not be able to fix it nor purchase a new one.
I think you might have answered your own question. If the car broke and you can not fix it, then you might not be able to for instance go 30% over on your rehab project budget because you got busted by inspectors and now they want allot more done to the place before they allow tenants in the house. (I use this because it just happend to me) Maybe try to get enough savings to support you, your bills and your project for a quarter. Just thinking out loud. May I suggest talking to an accountant? Hope this helps some.
Operating rental properties is ALL ABOUT THE NUMBERS! I would strongly suggest learning this business and your market before you buy anything. It is nearly impossible to buy a rental with hard money and come out OK. Hard money lenders charge ridiculous interest rates; several points; and other fees that make uncle guido’s loan shark business look like a saint.
I would also strongly suggest joining your local REIA (real estate investors association) and making friends with the SUCCESSFUL investors in your area. Finally, I would suggest writing a short business plan to define how you will get from where you are now to where you want to be.
Gaining financial freedom through rentals is certainly possible, but it will require a LOT of work. You MUST understand cash flow issues, operating expenses, and how to properly deal with tenants if you are to have a chance to be successful.