Happy New Year REI Professionals,
Hope everyone is doing well. I currently live in the Palm Springs Area, Riverside County, California, where properties are still cheap. I’m looking to purchase an REO for myself because I’m tired to pay rent! Here is the info:

  • REO Property
  • Fixer
  • 3/2
  • 1,500 SQFT
  • 5 acres
  • Swimming pool
  • Fireplace
  • Additional 1,000 SQFT that needs finish
  • Purchase price: 65K all CASH, “as is”
  • Approx Current Value: 165K, “as is”

Here is my sitation:

  • Low credit score due excesive medical bills. I do not qualify for a Conventional Mortgage.
  • First Time Homebuyer.
  • Do not have money for a down payment.

Since I need to be creative, I figure more experienced people in RE can give me some advise. Private Mortgage Cos and Hard Money Lenders are one option. Also, how long can I refinance after Private Mortgage, Hard Money Lender, and Conventional Mortgage? This property is for me to live in as my primary residence.

Any feedback would be greatly appreciate it. Thanks in advance and have a great day!


Christian B. O’Laarte
B.S., Business - CLU - 2005

Hard money loans are extremely expensive and are designed as a short term remedy. If you will be unable to get conventional financing in less than 2 years, please do not consider this route.

If you do not have money for a down payment, how will you pay closing costs? Repairs? Taxes? etc. Perhaps I would recommend looking for a rent to own scenario or buying on a land contract rather than considering creative financing.

Many possibilities… I will mention some:

  1. Private money mortgage…there is $7 trillion sitting in pension plans an IRA’s…ask and offer a better rate then the are receiving in their retirement and you will likely find your funding…most retirement plans invest in 1st mortgages.

  2. Offer Bank full price with bank reinstating loan and add a one time non qualifying loan assumption…this is better than bank having a non performing asset sitting on their stock shelf…plus will satisfy their stock holders…if you add a balloon in 7 to 10 yea s, that would give bank added incentive to do deal.

  3. Get a partner who has resources (cash or credit) to assist you.

Incidentally brother, one can eliminating all those medical accounts and negative credit postings through an administrative process and in an honorable way and in line with Scripture (see Matthew 18:15-17).

Help folks all the time in my consulting activity.

Hope this helps,


I don’t understand. Financing real estate using either a Land Contract, or rent-to-own “IS” creative financing.

Good idea to buy REO property but Banks or other mortgage lenders do not set foreclosure prices according to the home’s market value. The lenders try to cover their losses and fees. so the price value can be a more then you expected or less. I suggest you take a advise from RE professional before you decided to buy particular property.

Hi Olartec,
Buying an REO property is a good deal but according to your current situation, I will suggest you to firstly maintain your credit score then go for this deal.If you have any confusion regarding this, you can consult with experienced real estate professional.

Buying a property is a great investment but it is important to have a good credit score to buy a particular property.
You can also take advice from professional real estate expert.

I’ve long said and lived by – don’t let the tail wag the dog. We can convince ourselves of anything we want to.

You are young, you have some issues to address, and you have no money. Don’t force a harsh square peg into a very smooth round hole. Buying a property – to live in – with no money, poor credit, etc., might not be the smartest and prudent thing to do. Another “best buy” will come along. Buying now, contingent on some contortionist way of pulling it off, refinancing, and so forth, is biting off more than you can chew at this point. All the best.