Suggestions for funding in my situation?

[Jessica Hood]

I am currently living in a home I purchased at auction July 2015 as a foreclosure.  We have renovated nearly the whole thing with a 203k, plus our own sweat and tears, and are wrapping up now.  I am projected to have somewhere between $50k and $70k equity when all is said and done.

I want to invest in more properties for rental purposes, but am running into problems accessing my equity. My DTI is just barely over the max set by the banks and credit unions around here for a HELOC. I could do a cash-out refi, but it may not be worth it if the interest rate is not any better than 4.75%. I am not sure I want to do a refi anyway.

Since I cannot access that equity at the moment and I do not have a lot of savings, I was thinking about starting at the bottom of the barrel by purchasing one of these super cheap houses that is in need of a lot of work.  There are a LOT of them in Columbus, Ohio that are under $20k!  But even then, the issue is still financing.  Most mortgage lenders have property condition requirements that force you to account for the repairs with them and have it all done by contractors.  I want to be able to do it ourselves for the most part.  Or, the loan is so small that they won't touch it.  I was told that I cannot get any sort of personal loan to buy real estate either.  That is has to be a mortgage?  Not to mention, the credit score requirements for the personal loans are pretty strict.  At least 700 and I am not there yet.

I have heard of private money lenders, but that is new territory and I am nervous about scammers.  I don't know a lot about it.

Does anyone have any ideas or suggestions on how I could possibly move forward with my goals?

[John Horner]

Originally posted by @Jessica Hood:

Thank you for the information, everyone!  I really appreciate it!

@Riley Gilson Franklinton is one area that is as I describe, but I feel I have one better than that.  I don't really want to divulge the specific area on here.  Competition is already spiking in the area.  I have had other people mention Franklinton to me as well.  

I was looking for office space for my web development business and several people told me I should just buy commercial in Franklinton.  That it will be the next "Short North".  I remember when Short North use to be a terrible place.  Unsafe and everything was dilapidated.  It is beautiful now and booming.

I couldn't agree more with everything you said.  Columbus is a hodge podge of upscale, poverty, dead zones, and good potential areas.  Invest a few miles in the wrong direction and you could be in for a rough ride.  But it is obvious, as history and current activity shows, some areas can be a gold mine if the cards a played right. 

This website is about people helping people.

This is the definition of a scarcity mentality.  You want everyone to share their advice with you, but when you find something you "think" is worth something you refuse to share it for the fear of someone stealing it...