Would you recommend for newbies with little money or no credit find REO properties for light fix up to re-sell or lease option for the exit strategy? How does one find private money lenders to buy these properties?
What strategies are recommended for newbies or someone with little money to no credit to generate cash now?
Happy 4th of July!
Thanks,
Peter
As Bluemoon likes to say - the worst time to start a business is when you need money. If you have no money or no credit, how are you going to fix it up? Would a lender give you purchase price and extra money for rehab? With no money/credit/track record, probably not. Bird dogging might be your best bet unless you possess some skills that would make someone want to partner with you.
Banks aren’t going to sell you a foreclosure unless you can prove where the money is coming from. If you don’t have any money to pay for a REO, you aren’t getting one. Ditto for short sales.
You might be able to find property with owner financing, since nearly everyone is having a problem selling their property. Some sellers get desperate enough to carry paper in order to sell.
But again, you have to have the cash to make the payments until you can re-sell and you have to have the cash (or credit) to pay for the renovation to get the property ready to re-sell.
If you can find an owner financed property that doesn’t need much work, is a very low price for value, and doesn’t require a down payment, maybe you could turn it around without repairs and move it with a lease option.
However, even then, if your buyer/tenant walks away, you have to pick up the payments until you can get it sold again. You also have to repair the damage that was done by your irresponsible buyer/tenant. Believe me, a ticked-off tenant can do tens of thousands of dollars in damage.