First Time home buyer...Needs Hard money loan

I am a first time home buyer and I have found the perfect home for my daughter and I. I live in the metro atlanta area and need a home. I am currently working on credit issues, but I have found the perfect home for only $119,900 Foreclosure.

$119,9003 beds 2Â½ baths - Groovers Lake

Can someone PLEASE tell my how to go about getting this home!

Cyndi

Mitch Kronowit

SFR Investor · Orange County, California

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Jul 11 '10, 04:35 AM

Hard money lenders are only going to loan you about 65% of the home's value and their interest rates/fees are very high. They are best suited for flipping properties as terms for these loans are very short, typically 6 months to a couple of years. Then how are you going to pay them off?

For a personal residence and as a "first-time" home buyer, you should try FHA, although I'm not sure if your credit score will be a deal breaker.

Jon Holdman

Real Estate Investor · Wheat Ridge, Colorado

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Jul 11 '10, 04:40 AM

HMLs are going to require to have a very quick exit strategy. Six months, maybe nine. Can you clean up your credit in nine months?

HMLs want you to quickly and quietly walk away if things go bad. I'm taking back a house this week because the borrower hasn't been able to sell it. I'd never do a OO HML because I don't think you'll leave quitley. I think you'll say "but its our home" can't you help me out? For me, no, its a business deal.

Does it need rehab? Whats it worth after the rehab? The right answer here is "yes, it needs $20K in work. I need to borrow $140K. After the fixup it will be worth $225K." If the answer is "its move in ready", its not a good candidate for a HML.

Jon Holdman, Flying Phoenix LLC

Cyndi Willis

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Jul 11 '10, 05:00 AM

This house is a foreclosure and ready for move in. I am trying for FHA...But I really would like to have a plan "B" if it does not workout. I heard there are ways to get a private investor to purchase the home and then do / sign a lease purchase with me. How do I find these investors...I REALLY WANT THIS HOME.

Here is the MLS # 4079135

Mitch Kronowit

SFR Investor · Orange County, California

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Jul 11 '10, 05:05 AM

Originally posted by Cyndi Willis

I heard there are ways to get a private investor to purchase the home and then do / sign a lease purchase with me. How do I find these investors...I REALLY WANT THIS HOME.

This will still cost you, namely, the "option" fee. Then you are still going to have to be able to purchase the home, most likely at a higher price, when the lease expires or you'll lose the home AND your option fee. Maybe someone who has actually purchased their home this way could chime in. Personally, I wouldn't do it.

Jon Holdman

Real Estate Investor · Wheat Ridge, Colorado

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Jul 11 '10, 06:50 AM

Sorry Cyndi, but hard money is not really an option. You're going to need 35-50% down payment to make hard money work and then be stuck with 15% interest payments.

Your best bet is to work on cleaning whatever is bring down your credit, save some cash and then buy a place. I know it seems like you're going to miss out on a great deal, but there will be more in the future.

Jon Holdman, Flying Phoenix LLC

Kevin Yeats

Real Estate Lender · Fort Pierce, Florida

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Jul 11 '10, 07:26 AM

Cyndi

Jon is right. Work on improving your personal credit first. Save money, then look for a house.

A HML will require around $40,000 upfront from points (5) and a 30% downpayment PLUS all the other upfront expenses - title insurance, appraisals etc.

Your payments (principal and interest ONLY) will be over $1,000 IF you can find a Hard Money Lender that will give you a 30 year loan (at 15%). You will have to pay taxes and insurance on top of that.

Sorry to burst your bubble but look for ways to improve your personal financial position FIRST then look for a house where you can negotiate from a position of strength rather than desperation.

Good Luck

Danielle B.

· Colorado

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Jul 12 '10, 03:59 AM

In your case I don't think that HM is a good option at all, and buying the home and having someone lease it back to you is worse than renting, as you will be paying more in the long run.
I think FHA is your best choice, there are still a few banks that do not have a minimum score for the FHA product. Also, do not spend any money on any of the "remove all bad credit" scams. It takes time to fix credit, but fixing credit and saving money are the best things to do.

Vikram C.

Real Estate Investor · Phoenix, Arizona

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Jul 12 '10, 06:47 AM

The previous posters are right - HML is not a good option for a home you wish to live in. The down payment is high, the interest is high and the repayment period is short.

Furthermore, most experienced HML lenders will have you sign an agreement promising not to occupy the home. So HML is not an option even if you can afford it.

CHAMPAK SHAH

· Stone Mountain, Georgia

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Oct 28 '10, 12:39 PM

Hello Cindy --I will check the MLS --Not sure where Grover's Lake is -- How is your job situation and income ? Is your daughter working also ?

FHA ( 203) allows up to 110% --but will have rehab money in escrow --

Call Jim Duffy at [PHONE NUMBER REMOVED]
Try [LINK REMOVED]--have a branch office in Roswell -- a California Bank -

First Preference Mortgage -- [PHONE NUMBER REMOVED]

Hassan Omar --[PHONE NUMBER REMOVED]

Hopefully --one of them will help--
stay in touch --send me email if you wish

[SOLICITATION REMOVED]

Do you have a steady job ? Have you checked the area ? ARV ?

Is it Bank REO --already foreclosed or buying from owner -as pre-foreclosure ?

Bank may also do Lease / Option --ask your agent --they will finance after two years --
This will be new trend --

I had 4 br/2.5 bath in Stone mountain -- only 8 years old- nice subdivison --originally sold for $210,000 ---auction start bid $69,000 ---you can get for $110,000 --may be less--

Hard Money is not for you-- do Lease - Option or Owner Finance -- have patient -
and make more offers -- work on Credit --

Good Luck

Edited: 10/28/2010 at 12:48PM by Moderator