Real Estate Investor Seeking funding!

I KNOW right now is a crappy time to be an investor with low doc/ no doc but here is the deal…

i have around 801 mid score, own a construction company with my husband. He has been in the construction industry for 8 years and we decided last year to go out on our own specifically to do flips and rehabs. We have been doing them since 2000 and we research EVERY potential property that we buy extensively.

We have only been in business (construction, licensed) “on paper” since may of 06 but have done many jobs and need stated income loans.

The best deal we have been able to get is a 75% LTV on purchase price only! It is very frustrating.

We are in Michigan but in Southwest Michigan near Lake Michigan just an hour and a half from Chicago (our niche market).

Does anyone have any tips or leads to help us purchase more properties? We see a lot of money passing us by and our hands are tied!

Thanks in advance!

Also, we would like to offer owner financing meaning we will carry the loan on the property for a buyer for up to 2 years with 20% down. We would be screening the buyers credit and income (obviously)

You can use hard money to close your deals. There are many lenders on this board that can help you with those transactions.

Great to see your post. Would like to talk with you email in the future to compare notes. We are a real estate invest co and general contractor like you in Long Beach, CA but only with 2 years experience. One remodel/add on flip under our belt that finally sold in June. (Yes we lost money on it…held tooooo long and over improved it.)

We are trying to find low doc or no doc also. Our broker was also asked to find a no income line of credit for our primary for $300k to $400k on our primary res. That would take us to 80% LTV. So far the best we can do is a $190k from Wells Fargo. The only doc they wanted was three months of account statements showing we had $100k in the bank and copies of our city business license and a letter how we get sales leads and make money. I suppose this is to be certain we are actually a busines.

thank you for your replies!

Captkenth, im sorry you lost out on your first flip! That can be very discouraging. Im sure you have learned A LOT from that ONE house! California is a very dynamic market and property values change frequently. If you would like to email me I am happy to swap ideas and key learnings from our own mistakes. LOL!

If you are rehabbing properties, you could seek out a HM lender that lends on an ARV basis as opposed to a LTV basis—I’ll PM you with further details…


Scott Miller

The main question that needs to be addressed for both RealityCo and Captkenth is how long you’ve been actively investing in real estate as a rehabber/flipper. If at least 2 years, then great. Conventional lenders require sources of income to go back at least 2 years. This can be established by a cpa. Reduced doc loans may be one of the following…stated income, no ratio, stated income/stated assets, or no income/no asset. The business does not necessarily have to be licensed or incorporated in order to use it. However, you have to have a way to show that you were generating income (not actually documenting the amount though). Of course with stated incomes you cant create a fictional income to make the ratios work. You’d be better off using a no ratio or no income loan.

For those who are only landlords with no rehab/flipping income this typically wont work. The reason why is that lenders only allow 75% of your rental income income for qualifying. This usually creates a negative cash flow in their calculations for all of your properties. If this is the only source of income then it stands to reason that your liabilities on credit (primary mortgage, auto, loans, credit cards, etc) could not be supported. Having income from rehabbing/flipping can be listed as separate income from rental thus can be used when available.

Lenders recently released 90% purchase/cash out refi loans for all of the previously mentioned doc types.

But this may not be the exact solution to your needs. Putting 10% down takes up resources plus still leaves you with having to use money for fixing up. There are better alternatives in the way of rehab loans based upon the after repaired value. These rehab loans cover the purcahse, fix up, costs, and sometimes payments if there is room.

I’ve checked around for the 2nd mortgage that you need Captkenth and responded to your post but had no reply. Since you mentioned in this thread that you’ve been doing this for 2 years you may be able to qualify for a no ratio loan. However, for that loan amount I still havent found a stand alone 2nd; only a combo 2nd for $300k. This means a first has to be done along with it. What is your current rate on your first mortgage? Will continue to look for additional stand alone 2nds.

thank you for the replies…

ezloanz: if you read my post, it states that we have been rehabbing since 00. almost 8 years. my problem is that with most lenders they wont accept the 1099 i get at closing from the title office as income which is stupid, because it IS income.

i can show income generation definitely with no problem and can prove assets. i am currently working with a commercial lender who changed the rules of the game in the middle of the game. went from an 80-20 to a 75-25 and sucked a giant chunk of my cash out which sucks because i have to use my cash on top of that to rehab the property.

also, is there a way to do this without having so many inquiries on my personal credit reports? you only get 3 a year and they stay on for 3 years lowering the scores…

If you have recent trimerge credit report this can be used in the early stages of the due dillegence period.

After a broker pulls your credit, it may be acceptable to the majority of lenders to use the same one for up to 90-120 days.

Sounds like a 90% conventional (non rehab) loan would be available for you but this still wouldnt cover any fix up you needed. Rehab loans should be available to you as well.