I have a number of offers going out on REO’s, and I have several buyers in place the are looking to do “rent-to-own” (lease purchases). My general plan is to buy these REO’s at a discount and immediately set up tenants at about $200/month more than my mortgage payment.
The problem is that I will only be able to put 10% down on a few of these deals before I run out of capital. Can someone give me creative ideas and alterntives for financing something like this. Thanks in advance.
I am a new Mortgage Broker and Realtor in Colorado. I am also new to the investing scene myself. There is a loan program that will allow you to refinance and pull cash out on your house the day after you have purchased. The nice thing is you can use current current market value and not the purchase price. Example; you purchase for $98,000. FMV is $140,000. You can do a cash-out refinance up to 90% of the current appraised value of the house, which would give you a new loan of $126,000. Your closing costs would be rolled into the loan.
Aaron Latimer
Realtor & Mortgage Consultant
Keller Williams Realty
Very Interesting. I keep this in mind as I move forward. I’ll get in touch if/when I get one of these lined up.
I am also a loan officer working in Atlanta. There are multiple investor programs available that will allow 100% financing for non-owner properties.Since you mentioned 10% I assume you getting 90% financing. The only capital you will need is to be able to show 6 months of payments in reserve and handle closing costs. The seller can contribute to your closing costs if that is negotiated in the contract.
The only catch to look out for with the previous suggestion is seasoning of the fund from the cash-out refinance soon after the purchase. Some lenders may require that the funds be in your account for a specific period of time before they allow the use of the funds, usually 2 months. This is only an issue if plan on buying another property soon after the previous purchase.
Jaz
Jaz
What state are you in J?
Colorado, what about yourself?