Questions for financing

Hello, I am new to this site, and I need your help. Those questions may sound silly to some of you, but I can not find the answers…

Here is my situation:
Have cash of $12.000, FICO score is 640, want buy and flip a single family home, have lots of CC debt, but payment history is good.

I need to know… if I can get an investment loan, and if so, how much - 90% or 100%? If I get 90%, do I need to come up with my money to pay down payment, repair cost, closing cost, etc.? Or, a bank will give me some kind of line of credit based on my savings which will cover all the costs?

Thanks in advance.

if this is a short term move that requires rehab then the smart way to go is put as little down as possible. This lowers the initial invesment, in turn gives you a better % return on your money.

if you have lots of CC debt, why do have $12k in cash??? you are paying out the butt in interest (do realize you pay interest IMMEDIATELY on new purchases???)

you can not get lnes of credit based upon savings.

I know that it sounds not right… lots of CC debt and $12K cash on hand…
I needed to cash out my 401K, that the reason I have this money. I was thinking to pay off some of the debt with it, but some told me not to use all of cash to payoff the debt. And, I thought I could utilize this to get into REI, and eventually pay off the debt. Am I thinking wrong???
Many people say, “yeah, you can start this business even you don’t have any money”, but I would prefer to have some back up for just in case something goes wrong.


Hello, I would like to make a suggestion. Always go with traditional lenders first. A Hard Money Lender is a last resort. An HML will have a higher rate but bases their decision to loan on the project and not as much on credit. The idea of investing is to use OPM (other peoples money).

I don’t know your situation and don’t really care to. It is personal and I don’t think you should be posting intimate details on a public site. However, you say you cased out your 401k, have lots of CC debt and $12k in cash.

I think REI is a great path to wealth. However, perhaps you first step should be developing a financial plan. Perhaps speak with a Financial Planner. There are tons of things that they could do to help you grow your wealth too. Just take every word of advice they give you as advice and not gospel. Ultimately you have to make the decisions with your money.

Based upon your own post and making a judgement in a vaccuum, it appears you may have not been as responsible as you could be with your finances. If this is the case, then making tons of money in REI won’t fix that problem.

Build a solid financial plan for yourself. Get the assistance of a financial planner if you think that will help. Find a good CPA that does REI investing too so that they will understand what you are trying to do. Find a good attorney that can help you avoid the legal pitfalls.

I wish you great success!

Perhaps you are right, carlittle. Thanks for your advice.
I guess I am trying to find “the easy way out” from the current situation. I should read my husband’s book “The Total Money Makeover” by Dave Ramsey first… :wink:

I agree with carlitle…I would put the 12k into a house, sell it and have 24k give or take…then apply maybe 6k of that toward your cc and invest the 18k into another house and so forth…

I had about 18k in CC debt and bought my first rehab home, remodeled it myself and refinanced about 15k of the CC debt into that house, rented it out and now my tennants pay the mortgage, CC’s and i pocket about $75 per month(Usually put $50 of it toward my principal).

You really need a 660 credit score to get the highest LTV’s on investment properties, and you’ll need to have 6 month’s reserves left over after the closing. This is equal to 6 months mortgage payments verifiable assets left over after down payment and closing costs. Depending on the purchase price, you may need more money in the bank. As far as the “flip” idea, be wary…there are very strict “seasoning” requirements that are being enforced in the industy which say that the seller must have title to the property for a certain amount of time before they will loan on the property. So, in other words, you may exect to sell it quickly, but get stuck carrying that mortgage for up to 12 months, so make sure you account for this in your slush fund before you dive in head first.

There are more and more Lender’s offering 0-6 month seasoning requirements

I would have to disagree with you Sandra, there are lenders out there that will do no seasoning loans,