I have $100,000 available to me for obtaining properties. I am looking to buy a house for say $20,000, put $5,000 in it, and then refinance it for around $30,000 and rent the property. Sounds simple. The problem is that my credit score is around 630 right now, and my mortgage advisor is telling me that I am just not going to be able to get conventional loans for these houses. The $100,000 is available, but not for long term loans.
My question is what other ways are there of doing this without getting a conventional loan? Any help would be MUCH appreciated.
where do you plan on finding a property for 20k?
Depends on your LTV when you refi. So, that translates into… depending on how good of a deal you find. If, in your example, the ARV is say, $45k, then your LTV is good enough to do a refi, even with a 630 credit.
I wouldnn’t stick with just one loan officer if what he is telling you doesn’t sound right. Some LOs don’t like doing loans for such a low amount because it doesn’t pay much unless he is charging a ridiculous amount of fees. Even charging a bunch of fees, he has to stay within Section 32 rules, I suspect.
IMHO, you have a ton of options if you have $100k to work with. By they way, I wouldn’t touch a rehab deal unless I can pocket at the very least $10k. By the time you figure paying yourself, carrying costs, incidentals, the $5k spread may not be that much at all.
Properties for 20K in Fort Wayne, IN.
Thanks for the reply.