Potential first deal with no secondary market lending

6 Replies

I have just found bigger pockets and have dove into researching real estate, and looking for potential deals in my area. This afternoon my wife and I were driving around with Zillow/realtor open looking at houses and potential deals, and I think we have stumbled across an amazing deal in an area that is being flooded with new development and plenty more room for more.

This home appears to be a foreclosure and is listed for sale at $48,000, and needs some pretty hefty work on the exterior of the house. I'm assuming maybe and $30,000 just to make it livable. The value of the homes that are being built in the area of the same size are listed for more than $250,000. I would like to be able to purchase this home and renovate it enough to get renters in there for the monthly cash flow. Then a few years down the road as the new construction continues, consider putting more money in the home to sell it.

I'd really like to be able to lock in financing for this deal, but really do not understand the rules associated with purchasing a foreclosure, or "no secondary market lending"

Any sort of advice on this topic would be greatly appreciated.

Thank you

If it's in foreclosure and listed, you buy it like you do any other home on the market. You put an offer in, get it accepted, get your cash together, and close the transaction. You just have to close before the foreclosure sale or, have the seller request a hold while the sale transaction takes place (No guarantee there). If it won't pass section 1 criteria (Fannie/Freddie/VA), you aren't going to get financing on it through any channels other than hard money, and to get hard money, the numbers have to work for the lender, not for you necessarily.

If the sale hasn't occurred (The foreclosure sale), you aren't purchasing a "foreclosure".

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@Ron S.

I figured I'd follow up on this post to let you know I was able to close on my first deal!!! It was a duplex and I ended up getting it financed with an investment loan. Since then we have fixed up the property and have renters in both sides, and the property is cash flowing great.

Originally posted by @Matthew Reid:

@Ron S.

I figured I'd follow up on this post to let you know I was able to close on my first deal!!! It was a duplex and I ended up getting it financed with an investment loan. Since then we have fixed up the property and have renters in both sides, and the property is cash flowing great.

Great. So what was your money source in the end and how much did you borrow?

@Benjamin Hurwitz

One of my good friend's mother was a lendor at a bank so reached out to her. She was able to put me in contact with an in house lendor and she was absolutely amazing. She gave me a construction with a balloon payment at the end of one year. She financed the entire property and the improvements. Property cost $150,000 and $30,000 in repairs. Was able to finance it all. Looking to refinance now and get a traditional style mortgage.