Looking for correct type of funding!

4 Replies

I am finally at the point to start my serious search to move on properties when I find them. However, I am trying to setup any pre-approved loans if at all possible.

However, my question is what loan or what type of lending should I go after for the situation I am in which is:

I have good+ credit with very little DTI ratio and have saved up a good chunk of change saved up approx (20k) and I own my own home.

What I would like as far as a loan and what might be "real possibilities" probably are completely different, but that's why I am turning to the community. My preference would be to not have a traditional mortgage for any REI's because I would be paying 90% to interest on the front end, as it isn't until the second half of the life of your loan does majority of your mortgage payments go to principle. I say that because, if worst come to worst (inability to sale, financial problems..ect) then I would still be pay a portion off of the principle. This is the one I said might not be possible.

However, if that’s not possible, I was thinking about a "interest only" type of loan which could possibly keep my monthly payments down though, none would be going to principle.

Again, I am open for any suggestions for any type of loans, traditional or non-traditional.

Thanks in advance

It depends on your overall goal and how long you want to keep the property. Given today's rates I would suggest using as little of your savings as possible, especially if you have credit scores above 620. If you are wanting to hold properties for a short time look for good short time financing. The adverse is true if you are wanting tenants to pay off your mortgages. In either case avoid long pre-payment penalties in case a better mortgage product comes along

Live Long and Prosper!

Originally posted by "dcg123":
It depends on your overall goal and how long you want to keep the property. Given today's rates I would suggest using as little of your savings as possible, especially if you have credit scores above 620. If you are wanting to hold properties for a short time look for good short time financing. The adverse is true if you are wanting tenants to pay off your mortgages. In either case avoid long pre-payment penalties in case a better mortgage product comes along

Live Long and Prosper!

Thanks Dcg123:
I should have specified more specifically what I was intending to do in REI. To give details, I am mainly interested and mainly going to be persuing Rehabs. However, I will be approaching properties with that "how can this property make me money" which can ultimately take me down different avenues - so my eyes are open.

However, for the most part, and my main focus will be to obtain houses below FMV from motivated sellers that will be rehabbed and sold. Also, achieving the same results from the pre-foreclosure/foreclosure market fo acquiring-rehabbing and selling all within a 3-6 month period.

Sounds like you are looking for short term financing. I would suggest you start by developing a relationship with your personal bank. Start with secured financing against your savings. After a couple of successful transactions you should have developed the capacity to obtain large amounts of funds on signature. I also suggest looking for repaired value financing. To clarify: certain lenders will loan money for investment projects based on the repaired value of a property. This can be an excellent source to obtain monies for repair of rehabs. One such source in the Houston area is Coast Realty http://www.crc-loans.com/ I would contact them and ask them about like entities in your area.

live long and prosper

quote]

However, for the most part, and my main focus will be to obtain houses below FMV from motivated sellers that will be rehabbed and sold. Also, achieving the same results from the pre-foreclosure/foreclosure market fo acquiring-rehabbing and selling all within a 3-6 month period.

Thre are a number of things you could do depending on your goals. Based on the rehab look, I would leverge using max ltv, interest only loans. This will require little or no out of pocket and lower monthly payments untill sold.

Good Luck,

Scott

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