How to find capital for first investment property

Question

BP family my name is Vatrell Fountain new investor in Harrisonburg Virginia and looking to find capital for my first investment property. I have talked to lenders and I am trying to get my first property by house hacking but all the lenders are saying that my income is not stable over 2 years. Does anybody have any other ways to get a loan. I have done my analysis on the properties but can't seem to get a lender. If anybody has any knowledge to give I am all ears.

Cory Dillon · Answer

You can probably look into a USDA loan. Harrisonburg might be a qualifying location and they are not as tight on some of the things that conventional loans require.

Rich Littlefield · Answer

Here is one idea for youIf you buy a fixer, you can get one for 10% down  plus expenses.  It is a bit complex, and you need reserves because the cash flow is not immediate.Let say you buy a home for $100,000 and needs $20,000 in work, but will be worth $200,000 when completed.The down payment would be $12,000 plus closing costs, which can be expensive. Lender fees on these are higher because they are a lot of work. Take a lot of time. You need an appraisal that will cover AS IS and future values. ($850 is common)  You will have a facilitator, who will estimate the cost of the improvements you are making. Most of these kind of lenders (not all)  require you hire a contractor to do the work, or show that you have the experience to make sure the work is done to code. The other issue I have found is that the money for the improvements is only available after the improvements are made, but can be made in draws.  Every time a draw is made there is an appraisal  inspection and a fee from the appraiser before the money is released.  If your contractor will pay the cost of the improvement up front, this is not a problem, most contractors wand some money up front so you need to communicate with the contractor. The thing is on this example, you would end up with $100,000 in equity for an investment of about $20,000. Most areas will cost more because in most areas properties are more expensive.  I just  used $100,000 because it makes it easier to understand.