What is the easiest investment to get financed?

I would like to know what is the best first investment in regards to the easiest to get financing for? I have a low/average credit, make only 35k a year and at the time of my investment I will have 25k in cash and credit at my disposal. I know I am not going to be able to get financing for a property that is uninhabital. What kind of investment is the easiest to get financing for?

At the time I make my first investment I should have a 680-700 credit score, 25k in cash and credit, and making 40k a year.

I am interested in all aspects of REI and nothing is out the question. What do beginnerss with no partner in my sitaution do?

With your score and cash you should be ok for many deals, especially if you live someone where real estate is cheap. You can use a Stated Loan if you been on same job for 2yrs. This way the broker will state your income to quailfy you. The bank will only verify you work there and most likely want to verify your cash assets. Also keep in mind, if you have any retirement accounts, it will count as cash as banks look at cash reserves generally…

As for investments. You need to decide what you want to do. If you want to be a landlord, but a SFH or duplex to 4plex and rent them out. Remember a SFH will always appreciate faster and if landlording is not your thing, it will be much easier to sell a SFH oppose to multi family.
If your handy and can do it, check into a rehab, but you will need money to carry the home as it will not be collecting rent. You can always look into a rehab loan for conventional financing, or Hardmoney lenders which are faster to fund but hefty fees and rates plus you need a strong equity position.

before you start investing, think about what your short term goals are, sau 1yr. Do you need to build working capital, or are you looking for longterm growth (rentals)…

As for your credit…your just fine wit a 680, over 700 gives you more options but with a 680 you will be fine…

Thanks.

I want to rehab SFH and rent them out. I also want to buy multi-family properties. I want to make money every way REI will let me.

The thing is I am not handy. I have had a job painting houses but that is it.

I planned on using contractors. Do investors often strictly use contractors? I would imagine they do. This is the part that worries me. I know nothing about rehabbing and am not sure how to learn it.

Well since your not handy enough to tackle a rehab you will have to contract it all out to a general contractor. I would recommend attending some local REIA meeting in your area. You most likely will find a general contractor there that does rehabs for investors. I do not rehab any of my projects but deal with a rehabber. He acts as GC on every project and I do about 8-10rehabs a yr,

Also you can always find a great rehabber interested in REI but lacks the cash or credit. Team up together and split profits. In return, he takes care of rehab. You do not pay him for the rehab and split profits 50/50 or whatever you agree on.

Some GC will also agree to have you just pay for supplies, cover cost of labor and in return when you sell if your flipping, you pay them a percentage of the profits or they may charge you interest on the left of money in the 15-20% range.

Remember, each person is just looking to make money…

I would say owner occupied first rehab. Or medium commercial/higher cashflows.

No lending is usually going to do millions for commercial like 200+ units if you don’t have a smaller proven track record. so a 10plex with good rents to show the income. Owner financing helps to make it 100% and your credit is just an extra boost towards the approval, but not requirement.

Rental homes as well are sketchy to start cause people tend to not have the resources for the month its empty. Live in the home, work on it, sometimes just cleaning is the big part take the profits and roll to the next one. then you can use HELOCs or, 1031, or many other means of that forced accumulated equity to getting larger more profitable investments you then don’t have to live in.

My opinion.

Well with commerical, anything 5units and above will require at least 10% down, even with some owner financing unless they carry the whole note and he can do a leaseback, then refi later on…of course we know those deals are tough to find, even for experienced investors…

I almost recommend getting a 4plex going Owner Occuppied…but all depends on the market your living in. If your in an expensive market, its very hard to find a cashflow deal which is why I turned to rehabs now…

I planned on using contractors. Do investors often strictly use contractors? I would imagine they do. This is the part that worries me. I know nothing about rehabbing and am not sure how to learn it.
You should absolutely use contractors for rehabs. Only very small investors can do the work themselves on rehabs. They can make an above average income doing a few a year but they still have a day job they're commited to.

The fact of the matter is, you don’t need to know anything about real estate or rehabs specifically,to make huge money from it. As long as you know where to find those who are personally knowledgeable, that is the equivalent to knowing everything yourself.

Another exit strategy to consider may be to carry a second note for a portion of the sale price after you sell your rehabs. This way you will be getting a monthly cashflow, a huge lump of cash at the sale, without any management hassle.

“The fact of the matter is, you don’t need to know anything about real estate or rehabs specifically,to make huge money from it. As long as you know where to find those who are personally knowledgeable, that is the equivalent to knowing everything yourself.”

This is an incredible statement that I have found to be very true and every new investor should never forget! Its those who think they know everything that are in trouble.

Mark