BiggerPockets

As in the title, I have no income but I do have cash. Do you think I could get a loan at a reasonable rate, or am I limited to cash-only deals? It would be nice to utilize a little leverage. My FICO is around 800.

I'm interested in SFR with break-even cash-flow. Might be part of a 1031 exchange.

As Eddie pointed out, not a conventional loan through a large lender...

But, you may very well be able to get portfolio loans through small, local lenders (banks) if you have a good investment deal. Oftentimes, the small banks will look at more than just your DTI...they'll consider your assets/cash, your FICO, the deal, your experience, etc.

When I started in real estate, I had no income, but I was able to get large lines of credit based on my assets and FICO score.

Jason, although I agree with you that income may be secondary under certain circumstances, debt is a total different ball game. If that the bank sees your debt is too large and a big liability, income has a lot to factor.

Thanks for all the advice. No debt is a correct assumption. I may try a small bank, but I see now that these loans are apparently not common.

I went to a real estate seminar tonight and the leader suggested, firmly, that I should make all-cash offers and play that up as much as I can. In other words, try to find deals where paying cash is a strong bargaining point and gives me an edge. I'm not sure which types of deals those would be, but I'll look for them.

Update: after posting this I'm thinking maybe an advantage I could offer is a quick close. Assuming I was able to do inspections, title search, etc quickly, I could close within a few days.

Robert,

As the saying goes - "cash is king"

If you have the capital to make all cash offers and can close quickly, then you will have an advantage over other real estate investors that have to make their offer contingent upon financing.

I've had lower offers accepted over other RE investors by offering all cash, quick close, no contingencies, and by offering a significant earnest money deposit.

When you make your offer, make sure you include your proof of funds.

Re getting a hard money loan, if you have cash and good credit, then you should have no trouble getting a hard money loan.

Robert, if you have good credit and enough cash for a down payment, you can get a loan to buy commercial property. The bank considers the income of the commercial property rather than the income of the buyer.

Interesting Eddie...Can you shed any more light on how this works? Specifically, what is going on in step 4? Is that where the bank gives you a conventional loan?

Hey - I assume you are planning to buy a rental ( investment) house. Since you are looking for break even cash flow.
You did not say how much cash do you have. Also assume that you are not workinga nd do not need tax shelter.
Here are your options my suggestions:

1. Yes -you can get a loan with 30 % down -on investment property. First if possible - have prospective tenant. You can get that from Section 8 housing --at your city or county.
2. Call several doctors or attorneys in your town - and ask for Private Investors to do loan at 70% LTV - and offer 6% or 7% rate -- 30 year amortize - five year ballon - interest only payment. Make sure the numbers work with rental income.
3. You can also go to court house and find private investors who has made loans. Contact them for loan or JV.
4 Advertise in local --nearby large city - for investors and offer 8% interst or 50%
profit sharing --
5 Better yet--why buy and rent --buy fixxer upper - and sell to other Invetsor -called Flipping and make more profit without landlording hassels. Learn more here in BP about REO and Wholesaling or Joint Venture with other invetsors in your area. Hope this gives something to think about.

Lot will depend on how much cash you have, what you feel comfortable doing
and what price houses available in your area.

champak shah

A followup....and something unexpected. I was able to get a loan on the basis of the following: I have most of my money in a brokerage account, and a smaller amount in a checking account. A monthly wire transfer moves money from the brokerage into my checking so I can use it for daily expenses.

According to two different lenders, the amount of this transfer counts as income as long as it has occurred for 3 years and can continue for 3 more years. It appears this counts as "regular reliable income" per Freddie Mac guidelines. This was surprising to me, as I'm just moving money between my own accounts, and no accountant in his right mind would call this income. I went on to refinance with one of these lenders and Freddie Mac now owns the loan.

I would like to know this too.