I'd like to know from anyone who has the insight if this is possible. First, FICO is app. 700. I'm looking to start investing in a bank owned property. If the property is priced at 27000 and has a appraised value of appr. 32000 and I put 10% down (2700) do you think a bank will give me a loan on the house? I have been in my current home since last Aug. and have never been late on a payment. I'm looking to hold this house short term, make it look nicer and hopr to turn it around for 2-3K profit. My CU is now offering home mortgages, that probably would be a good place to start. Any advice would be appreciated, thanks!!
700 is a very acceptable score for investing in RE...I work with a lot of folks who have worse! You mention your CU....I'd suggest that you give them a quick call (no application information) and just ask if they will give you a mortgage on an investment property (as opposed to a primary residence.) You might find that they do not. Your next question would be your LTV question...if you work with a broker such as myself or others, you should be able to get 100% financing with that 700 score and no lates, but you may find that your CU or your local bank, IF they'll do a NOO (non owner occupied) loan, they may insist on a 25-35% downpayment. As a RE investor myself, I would suggest you take a long hard look at 'the numbers' of the project you talked about in your post. If you don't see yourself being able to make any more than 1-3k when you exit this deal, I would suggest that there just isn't enough 'meat' on that bone to gnaw at -- ANY unexpected expense/overrun or revenue shortfall (carrying costs? realtor commissions? broken boiler?) would seem likely to drive you upside down in very short order. Congrats on thinking REI...it's a great field.. Feel free to contact me at MentorForWinners@aol.com if you'd like to discuss Mark
KOZ... Two other issues that I didn't mention above, which you should be mindful of... Mortgage lenders are not typically looking for short term loans...they just aren't profitable enough to get into and if they are paid off too soon (part of the reason for "prepayment penalties"), the secondary market investors will charge them back to your lender. There ARE, however, lenders who will do short term loans if they know about them..but they adjust their pricing. You are planning to sell to YOUR buyer after a relatively swift paint-and-paper rehab....your buyer will run into an issue known as seasoning of title--most (not all) lenders want to see the seller having held the title for 6-12 months, especially if therre is a significant difference between what you paid for it and what you're selling it for...
MIKE! Where you been?!?!? LOLOL I think Selfrepair is right on. There are risks involved. Your profit should outweigh the inharent risks. GREAT to see ya again.
Thanks Butch!! Just after buying the house last year and being in RE clases, my time got taken up and after receiving all of the GREAT info. from this site, and then taking care of those credit issues, I just kind of faded away. But now that I'm getting back into another type of financial dealings with possible real estate issues, I'm back here to get valuable information. I've actually helped a few people in my office with their credit situations b/c of the great people here. Would you be aware of any groups or organizations that are here in central OH who discuss RE issues? Glad to see your alive as well.
