No Doc Or Great Credit But Own House,forget HELOC?
My wife and I bought a forclosure that we own free and clear, we paid cash with no loan. We want to fix it up, rent it out, use the equity to buy again and repeat the process. We arent able to show documentation of income (self employed carpenter and painter) or have brilliant credit , my average is 572, unsure of hers. We are able to do the work ourselves and can create at least 50% equity in each property we rehab,so are there lenders that dont care what we look like on paper as long as our real estate holdings are twice as much as our loan amounts? Ive talked to a couple of hard money lenders that dont do small loans so I came to realize what we needed was a HELOC but I guess we dont fit the standard mold of borrower. We have a free and clear asset and I understand most borrowers dont, so are there lending solutions now or do we need to spend a couple of years making ourselves look good credit and income wise before we try to pursue our investment career? Advice from credit and mortgage specialists would be very helpful for us right now, thanks.
Why not repair/create credit while repairing the property?
Buy the materials for the rehab at a store(s) that offer credit like a Lowes or Home Depot, make sure you pay at least the minimum balance on time, every month, for six months. Then maybe get another card from Sears and purchase appliances or tools or something you need to improve this property.
Make sure you meet your current obligations as well, if you already have accounts with suppliers than make sure they are always current.
Once lenders see a history of improvement and good payment for a couple of reporting periods they will warm up to extending you a loan. It is best to maintain a solid payment history and zero or low balances, combine that with a property that has equity and positive cash flow and the banks will almost beg you to take their money.
Thank you ebaybobby for your advice. Although it seems that getting credit from a place like Lowes or Home Depot would solve a good part of our rehab problem, the same lack of good documentation that would normally allow us to finance our deals also keeps us from looking good enough to get materials on credit from places like that. But it would help immeasurably just to have materials since we can do all the work ourselves. However, we are quite willing to use our property in any way possible to leverage our investment goals, there HAS to be some way to use it to move ahead. We are able to find good properties at good costs and since we can fix them ourselves we can accumulate at least 50% equity on a rental so it would seem like a very secure and profitable investment. If we have free and clear collateral wouldnt that compensate for a lot? Im sure some of you out there started with less than a free and clear $50-$60K house to use in any manner possible. Any credit solutions? Thank you.
OH Geesh!!!!
Kepp looking...... I onlly could wish to be in your situation.
I am finding the deals and cant seem to put it together because of lack of money or my FICO being too low at 630.
I would say keep looking as someone is going to asist you in getting a loan. The first one may have to put up the new property as well as one of the others for collateratal BUT since you make your payments and only doing to profit anyways you can sit and wait a few months to refinance and not be rushed for a quick flip.
I wish I had your troubles. LOL
Good Luck
is the credit an easy thing to fix?
Find and talk to a loan broker, seems like you should be able to get a no doc HELOC.
Maybe shop for another hard money lender that might give you the "HELOC" on your home.
Have you called them?
well I called them this morning t find out the dates of the service and cancellation but and I requested a print-out of all the activity that took place but I have not talked about paying anything yet
Explain to them the situation and maybe they will cut you some slack.