Newbie Question - My First Investment

Hi everyone,

I’m so glad I found this site! I am new to real estate investing, and lately (past month) have been looking for potential rental properties. I’ve got my eye on one duplex in which the asking price is $84,000. The current yearly income from the property is $9600. (there are actually 2 duplexes selling for the same price and has the same income…but I’m just interested in one)

Is this too much of an asking price? I think so. I looked up the tax records of this property and found out the current owner bought it in Febuary of last year for only $60,000. I’m thinking about offering $60,000, or perhaps $65,000.

I’m not sure if my offer will be accepted, but we’ll see. My concern is mainly with the financing. Should I go with a broker that deals with many banks, or should I deal with only one lender. I contacted Bank of America, and they informed me that I would need to put 10% down payment if my beacon score is 750…but I would need to put down 20% since my beacon score was in the 600 range.

Another problem would be my debt ratio. My debt ratio currently is 36%. But if I did get the new mortgate, even factoring in the additional rental income (75% x 9600 = 7200), that will put my debt ratio close to 40%.

So my question is, will the 40% debt ratio hurt me from getting the loan. And is there any way I can avoid the high down payment?

Howdy Bling:

Shop around. There are tons of mortgage brokers that can get you great financing especially if you have good scores. You can get all kinds of no doc loans where they just ask what you make and that is that and with 620 or above and some good mortgage credit you can do 0 down even with a piggyback program. Americaquest is aggressive as all get out. You should at least call them. There are some great lenders also that post here on this site and have ads in the ad section as well.


my advice to you is to learn how to be creative with your financing. i just bought a mixed use property (3 rentals and 1 storefront) with no mony down and no income verif. there are ways around everything. although its good advice to shop around for the best program for you, the last place i would start is ameriquest. they have a great rep. for screwing people out of their money. the gov. here in connecticut is about to revoke thier brokers licinse for predatory lending. ask around and find a good broker in your area that specializes in investment loans. save that 10-21% down for something else like another investment

Howdy Jim:

Thanks for the info on Ameriquest. I knew they were aggressive but did not know that about them.


Thanks for the replies. Do you guys have any suggestions on how I might be creative with financing so I can pay little or nothing down. I’ve never seen the Carleton Sheets course so I’m not really familiar with these different ways. Any suggestions?

the easiest way to put no money down is to qualify for 100% financing. i would need some more specifics in your caes but it seems on the surface you should be fine. if not then there is always the bump-up-the-sales-price method, or have the seller hold a second. most “techniques” used need to be explained face to face and shouldent be broadcasted on a forum because they can walk the line of fraud if your not careful. or so i’f herd always remember though that in most cases you do need some kind of money to close. taxes, insurance prepaids, etc. the game is to minimize that number as much as possiable.