absolutely disheartened.

Commack, NY · Member since 2013 · 29 posts · 8 votes

I live in NY, I own a home that I live in, and it has a decent size mortgage as you can imagine. I was looking out of state for rental properties, in a particular area, looking to make contacts to explore the feasibility of doing it there. I started talking to a mortgage guy and I pretty much feel like i'm screwed now. The basic requirements as some of you may know are as follows (simple single family res.) 20% down, credit 720 and up, DEBT TO INCOME RATION of 36% or lower. I make a decent salary. I just have NY expenses. I'm pretty sure I am out of the game. So frustrated.

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Ryan R.

Real Estate Investor · Central, TX · Member since 2012 · 479 posts · 165 votes

12y

Where there's a will, there's a way. I was in your shoes not too long ago.

You've reached a road sign that says "Road Closed", it's time to get creative. Most people will turn around and keep the excuse in their back pocket that they tried. How bad do you want to get to the other side?

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Brie SchmidtBusiness Member
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Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
12y
My lender does 25% down, 720 score, and 45% DTI
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Ali Boone
Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
12y
Have you tried a couple different lenders? And make sure they are investor-friendly.
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Ryan R.
Real Estate Investor · Central, TX · Member since 2012 · 479 posts · 165 votes
12y
Where there's a will, there's a way. I was in your shoes not too long ago.

You've reached a road sign that says "Road Closed", it's time to get creative. Most people will turn around and keep the excuse in their back pocket that they tried. How bad do you want to get to the other side?
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John Giamundo
OP
Commack, NY · Member since 2013 · 29 posts · 8 votes
12y
well friends, so far i have only spoken to the one mortgage guy. He claims to be investor friendly, but I don't know him, so who knows. @Ryan R. I don't know what you mean. I'm certainly not going to put my family in a weird situation or anything like that. Do I want investment property? Sure do - as long as its a good investment of course.
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Dawn AnastasiPro Member
Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
12y
Originally posted by @John Giamundo:
well friends, so far i have only spoken to the one mortgage guy. He claims to be investor friendly, but I don't know him, so who knows. @Ryan R. I don't know what you mean. I'm certainly not going to put my family in a weird situation or anything like that. Do I want investment property? Sure do - as long as its a good investment of course.

If you've only spoken to one person, then you need to start speaking to lots of other people. You may want to try smaller banks or credit unions that have different criteria. What state were you looking in? Someone from the forums may be able to jump in and give you some recommendations.
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John Giamundo
OP
Commack, NY · Member since 2013 · 29 posts · 8 votes
12y
North Carolina
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Ryan R.
Real Estate Investor · Central, TX · Member since 2012 · 479 posts · 165 votes
12y
There a lot of things you can try.
1. Partner up with a seasoned investor who can front the down payment
2. Find a hard money lender
3. Wait and save up the 20%
4. Pull equity out of your current house as down payment
5. Take loans from retirement savings and use as down payment
6. Pull together a good enough deal that the bank bends its lending criteria
7. Find properties that a bank already holds and is willing to finance for you
8. Find owner financed houses
9. Get a part time job to save up the 20%
There are many other creative ways to make deals happen. Get creative. Successful investors know how to get things done when others become disheartened and walk-away.
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David T.
Specialist · Las Vegas, NV · Member since 2013 · 639 posts · 176 votes
12y
You can also hit up a few friends and/or relatives for personal loans, even though its' not the best way to go, sometimes it's the ONLY option.

I'm still a firm believer in finding a hot deal is the best way to get started. That takes time and effort, but if you find the right deal, you will find an investor.

Your weapon of choice for that is BP. We'll critique any deal you put up here - with relish! A lot of hungry investors hanging round here, myself included. So IMO, you haven't failed only because you have not started, @John Giamundo

Go find yourself an awesome deal. Patience, discipline and a smidgeen of luck!
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Sam T.
Investor · Pittsburgh, PA · Member since 2008 · 163 posts · 50 votes
12y
I have faced similar roadblocks and thought I may not be able to move forward. I found some investors (hard money) lenders and got started that way. be careful doing this the hard money lenders will give you the money the problem is you will need an exit strategy as the hard money loans are high interest and will require you to pay it back in a short period of time. this is great for doing flips but if you plan on holding and cannot get traditional financing in the end it will hurt.
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Jean BolgerPro Member
Aurora, CO · Member since 2012 · 2k+ posts · 1k+ votes
12y
It's tougher at first! Keep looking! 720 + and 36% DTI are pretty stringent requirements. You're likely to find a better situation than that. Might cost a bit more... or not.

(And, as an aside... why do mortgage guys have such power to make us feel so disheartened when we're starting out? I still remember one lender looking at my tax returns and asking, in a rather scathing tone, "How do you even live on that?" .... I've moved on, but obviously the scars remain, lol!)

How's your equity in your home? The same lenders that won't give you a cent to spend on a cash-flowing property might be eager to give you a Heloc. (For some reason they think a kitchen remodel is the better investment...)
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Bryan L.
Residential Real Estate Agent · Cookeville, TN · Member since 2013 · 1k+ posts · 948 votes
12y
@John Giamundo - One thing that I've learned in this business is this: I've learned to smile at the difficulties. For if it were easy, everybody would be doing it, and then there would be no money in it.
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Robert G.
Residential Real Estate Agent · Miami, FL · Member since 2013 · 195 posts · 138 votes
12y
Sounds to me like you need to find a partner. Either someone with sufficient capital or someone that meets the credit/ratio requirement for the financing you want.

Either way, one positive thing to keep in mind is the difference in the local economies. You're in NY and, as you said, you have a significant mortgage. That doesn't have to be the case for the rental properties. You can cherry-pick areas that cash flow well and have low entry costs (cheap prices). You can probably find a decent rental for 50k to 60k, lets say in Cleveland, which shouldn't be all that pricey coming from the NY market. 10k down and financing 40k seems to be an affordable way to get into the game.
2 Reply
Rafael Norat
Investor · Lodi, NJ · Member since 2013 · 487 posts · 179 votes
12y
Joe,

I too started a littlle while ago and had little money to begin. I suggest attending your local real estate meetups and networking a bit. I think its absolutely critical in establshing your success. There, you'll find local contacts with that had similar issues and good support groups to keep moving in the right direction. I just closed on my first multi 2 weeks ago, closing next week on another, and partnered up with an experienced investor on multiple rehabs, and have a great network to build from. I wouldn't have had that without networking here and at my local REAs. There are plenty in NJ and NY. I met my PA partner through bigger pockets. PA offers low entry point (30-40k) mutlis with 15%+ ROI in C neighborhoods. I'm finding 10-12% ROI in NJ on multis (C neighborhoods) with better equity returns then PA. Between the 2 states, there's plenty locally to build a good portfolio. Hope that helps and reach out to me if you'd like more info on anything. It took me a good 6 months of 100+ podcasts, BP, and 20+ REAs. But its well worth it!

Rafael
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Jon Holdman
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
12y
36% DTI is very low for investor loans. This broker is not investor friendly, no matter what he claims.

As @Dawn Anastasi says, you need to turn over a lot of rocks to find a good lender. If you call two or three DOZEN and find a handful that will do investor loans I'm sure you'll find better terms.
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Dawn AnastasiPro Member
Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
12y
@John Giamundo

I would also have you go back and listen to the podcasts, near the end of each one there is the question "What separates the investors who are successful from the ones who don't make it?"

You'll hear a lot of times that the answer given is perseverance, drive, focus, etc. Don't give up so easily or else it's a self-fulfilling prophecy. If you want to be a real estate investor, then be a real estate investor.

Do you remember in the movie "Top Gun" where the guys were not getting their planes off the ground in a short span and they were thinking it was impossible until the instructor showed them that yes, it can be done? Then they were very determined thinking "Well, if he can do it, so can I" and they did it.

Others have done it, so you have to believe you can too.
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Shawn McenteerBusiness Member
Realtor · Boonton Township, NJ · Member since 2013 · 2k+ posts · 1k+ votes
12y
NYC meet up is happening soon. Find the details through the BP search engine and do your best to attend.
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Ryan R.
Real Estate Investor · Central, TX · Member since 2012 · 479 posts · 165 votes
12y
@Dawn Anastasi I don't remember that part in Top Gun, maybe I've missed it every time. Now I'll have to go home and watch it again just to be sure..
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Dawn AnastasiPro Member
Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
12y
Originally posted by @Ryan R.:
@Dawn Anastasi I don't remember that part in Top Gun, maybe I've missed it every time. Now I'll have to go home and watch it again just to be sure..

I've only seen the movie one time but it was because they had to get the planes off the runway in the span it would be to get off an aircraft carrier. It's not my favorite movie but I remember that part.
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Ryan R.
Real Estate Investor · Central, TX · Member since 2012 · 479 posts · 165 votes
12y
@Dawn Anastasi I believe you are referring to the scene in the movie "Pearl Harbor" where they act out the training for the "Doolittle Raiders". Also a great movie.

As a side note, I believe the Raiders are down to 3 or 4 in number and word is they cracked the bottle of brandy last year. God bless them.
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Robert G.
Residential Real Estate Agent · Miami, FL · Member since 2013 · 195 posts · 138 votes
12y
That definitely is not in Top Gun, Dawn. You must be thinking of some other movie. In Top Gun, the opening scene has them in the air and landing (on low fuel) on an air craft carrier. They are already very skilled pilots. Top Gun is the name of the school where the best of the best (pilots) go......
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Jason C.
Investor · Austin, TX · Member since 2014 · 217 posts · 170 votes
12y
@John Giamundo I think every lender I've worked with has told me at some point they will probably not be able to get my loan approved, but a good mortgage broker will persevere just like a good investor.

That's going to make such a good story when we write our memoirs later on!
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Dawn AnastasiPro Member
Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
12y
Originally posted by @Ryan R.:
@Dawn Anastasi I believe you are referring to the scene in the movie "Pearl Harbor" where they act out the training for the "Doolittle Raiders". Also a great movie.

Okay, well wrong movie, right idea! :)
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Rolanda Eldridge
Investor/Realtor · Hoover, AL · Member since 2010 · 1k+ posts · 459 votes
12y
@John Giamundo ...You can do this! Most of us start with limitations, but we make it work. Network, Network, Network!!!..I got an opportunity after meeting a colleague of a mortgage broker (2 yrs) after initial contact.(patience) This connection put my RE on fast track!...I will never let a NO, determine my destiny!.....Find a way....
1 Reply
Cynthia Scott
Wholesaler · Owings Mills, MD · Member since 2014 · 9 posts · 2 votes
12y
John: What areas are you focusing on? We have a lot of deals in Baltimore metro area where you could get a house for cheap, fix it up and hold onto it as an investment. I am originally from NJ and costs of properties in that market and NY are way more expensive than in Baltimore. I am sure you could find something here that might be more manageable financially. You might also see if someone would partner with you, so that you aren't holding the entire nut.

Cynthia Scott
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Geoffrey Murphy
Real Estate Investor · Hartford, CT · Member since 2011 · 222 posts · 17 votes
12y
@John Giamundo - ever considered private money?
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