Help me creative financing experts!

2 Replies

Lets brainstorm how can I buy a lets say $500,000 or $480,000 house with only $10,000 and low credit?  

Located in Los Angeles.

The home has 3 bedrooms and 1 bathroom 

Can a property like that cashflow?

can I even afford it ?

@Cirilo Villar

I can't speak to whether or not it would cash flow, as I am not familiar with that market. I also can't speak to whether or not you can afford it, as I don't know your financial information.

What I can speak to is that zero or no credit, is only relevant if you need a bank involved, or the seller makes an issue of it. 

1. The simplest way is to get the seller to carry a note, with your 10K down. I won't lie, it's probably not going to be easy to convince them to do this, with minimal down. If you have excellent negotiation skills, you might stand a fighting chance. You will really have to sweeten this deal for them, higher interest, higher purchase price or both. Get creative!
2.  What may be the best option for you, is to offer the seller some equity into the deal. Discuss what a partnership would look like and where you will benefit the partnership, outside of cash contributions. Construction? Management Experience?  

3. Bring in an outside cash partner to fund it and workout the partnership agreement with them. 

Hopefully that gives you some ideas. Take some time to really get creative with your offer, and make them think really hard before saying no.

@Cirilo Villar

There are a lot of other factors and information needed to even begin to consider this scenario. First, what do you plan on doing with the house? Does it need any work? Is it worth $500k or is that what you'd be buying it for? 

If you don't have money for a traditional down payment and low credit, at the least, it means you can't get bank financing right off the bat. Of course, as RE investor, most people on BP don't buy using traditional bank financing.  But again, to my first point, there are so many other factors and information missing in order to be able to adequately consider your scenario. 

Being in a higher-end market, if you only have $10k (assuming you don't bring on a partner) you could easily get into a lot of trouble if you do any strategy other than wholesaling. Good luck