Creative financing/Low or no money down/private funding
Hello BP Community!
I'm new to the real estate game! I'm sort of stuck between a rock and a hard place. A few years ago I house-hacked a duplex then starting saving up for another investment. In May I bought a fixer/upper single family home with cash with the help of relative and plan to either flip it or possibly BRRR if the market starts dropping. I'm currently using a combination of interest free Home Depot CC promotions and cash to fund the renovation.
Just recently, my W-2 job offered me a very attractive opportunity to relocate to Northern Michigan ASAP. I want to buy another duplex up there or a single fam house I can renovate. I really don't want to rent a place up there. I was hoping to rent out the other side of my duplex to exclude my mortgage to improve my debt to income ratio, unfortunately because I reported a loss on last years taxes for the duplex they said I have to rent the new side for an amount way higher than market averages.
I'm sort of tight on cash at the moment because of the fixer upper so I was hoping to buy with low or no money down (USDA). Also, the market in Northern MI is very expensive due to tourism with the explosive short term rental market.
If anyone has any ideas for creative financing it would be much appreciated? I was thinking of finding a rent own property but those are rare in a hot market and sellers generally ask for 15-30% down. Any insight or expertise in the area would be very helpful!
Thank you in advance,
Josh
How did you report a loss for the duplex last year? Where are you in terms of the current fixer? How much longer to get it ready to go?
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After deducting the mortgage, utilities, general maintenance expenses, depreciation, etc it was a net loss. Once I rent out the otherside (where I currently live) it will cashflow well.
Hopefully the fixer is done by the end of August... we all know how that goes. Originally planned for Aug 1st, I'm sure more things will get delayed. I rather not wait and frankly I need to be up North as soon as possible.
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#2 Managing Your Property Contributor
- Property Manager
- Royal Oak, MI
@Joshua Randall Manes find a private money lender to help you with the 20-25% down and get a commercial loan.
Joshua,
Look into a conventional 203k loan if you can handle the interest rate. These are great options because they offer the conventional route for units that you intend to live in and usually have a lower down payment.
Just a thought... Seems like a better hack not having to go commercial.
-B
What kind of loan do you currently have on the dup? Is a second position / HELOC allowed? If not, have you thought about refinancing the duplex into an LLC to take the mortgage out of your name? That would help your DTI
