Best Investment
I am in a situation where I have about $1500 and really bad credit. I am working on the credit but my question is, what is the best way to invest my 1500 in to real estate or is there any kind of deal that I could do to make the most of my money. I've thought about forclosures. I've found one that is only 9000 and I have a friend with good enough credit to get the rest financed. I just want to see what you guys think.
Also, is there any financing companies that will give financing to people with bad credit if they can come up with 10-15% of the down payment.
Any response is greatly appreciated.
Thanks
David
Two recommendations, David.
1. Buy John Locke's sub2 manual and learn how to buy houses without getting new credit. (There's plenty more info in the forums on this site.)
2. Hard money lenders. Most of them will finance you as long as the deal is under a certain %age LTV. It's expensive money (15-18% and 8-11 points) but if there's enough equity in the deal, you can still come out making a profit.
I'm doing a deal with hard money. I'm getting the house for 35K, the repairs are about 5K, the financing and carrying for 6 mos. is 7K and reselling costs 4K, so I'll have about 51K in the house and it comps out between 68,2K - 78,9K (4 comps). Even if I sell it at 60K, I walk away with 9. Not the best deal in the world, but I didn't put any money in.
Hope this helps.
Ronnie
[addsig]
Hello,
Get your credit in order first. Educate yourself with books on no money down, or foreclosures,tax liens.
It's better to invest in education than make a critical error through trial and error.
Yes, work on your credit.
In the mean time, you may consider a joint venture with your friend. He does the financing, you do the labor, sell and split the profits. I am currently doing this with two others (I am the credit guy, they are the laborers). It is truely a win/win.
Ron
PS. Check out DeCima (?)- Fixer Jay's book on buying fixer upper's. He covers how to do partnerships/joint ventures. I highly recommend his book.
Ron
Hey thanks guys,
I am also looking into a deal where a lady has a rental that she is trying to sell. I over heard her talking about it to my nieghbor and asked if I could take a look. Turns out that she only wants 20k for the house. The home needs paint and carpet but the wiring heating and air and the plumbing are less than a year old. The comps are around 75-80k(3 houses)
She has owned the home for 30 years and has rented for most of it. The tenants recently moved to purchase there own home and now she's too old to deal with the hassle.
My friend and I are currently looking for a hard money lender to loan about 35K so we can do the cosmetics and resale for around 70-75K
If anyone has suggestions about some lenders then feel free to let me in.
Thanks
David
You can get a land contract with her. That way you can "own" without a lender and build credit. After a year or so of on time payments and other work on your credit, most any bank will loan you the money to buy it with as much equity as you say is in it.
Just one way,
Ron
Or, you can do a lease/option. Tell her, "Ma'am, I would like to buy your house, but I can't for about another year. Would you consider leasing it to me with the option to buy? I will, from now on, take care of all repairs and expenses out of my pocket. In a year or so, I'll refinance it and pay you your full 20K. I really like this house and want to live here. Could you help me out?"
Once you have the option to buy, you can feasably put the house up for sale and do a double closing. (If you want to sell it.)
I'm sorry. I've steered you wrong. Land Contract, I think would be better because you can show the bank that you've been paying on the house for a year and therefore, you can 'RE-finance' it, and get extra cash to do remodeling.
Somebody correct me if I'm wrong, but if you L/O it, the bank will consider your re-fi an initial purchase and want 20% down and all that jazz.
Sorry for the goof up and I hope I haven't confused you too much.
Ronnie
[addsig]
I'm in the low 500's and would have lost countless deals if I had to wait and get my credit in order...
Same old blah... blah... blah.... My credit is trashed and nothing less than about 250k and time will get it back on track...
Already bankrupted and kissed by attorney and the "x"
do get your credit straight "someday"
L/O is what I do a lot of... $10 gets it for me everytime ... I have never paid a dime more.... make money up front/monthly and the end....
do find the nitch thats right fo you.....
p.s. Privat Money never looks at credit scores...FYI
Thanks guys, I'll give it a shot and let you know how everything goes.
Dave