@Luke Fernandez it may be a great deal, although we don't have any of the details. What kind of property is it? Why is the credit union so desperate to get rid of it? Are there tenants currently? Are they paying?
From the outside with, admittedly, limited info, I am going to assume that you will need to put a bunch of cash into this property once you acquire it. No one sells a well performing asset for no money down, so there has to be a catch. As long as you know what the catch is, and are ok with it, then I would say go for it.
If someone tells me they are buying AND rehabbing a property for 25k, I'm skeptical. Be sure you are being realistic in your rehab costs.
But if the deal is as you say then the only downside I see is the variable rate. If interest rates keep rising you could end up with a more expensive loan. But that would be an acceptable risk for me if I were given the same terms as you.
Sounds like an interesting deal! The key to loans like this is to make sure you can force at least 25% equity within the first year and still cash flow a comfortable amount. That will allow you to refinance with a conventional loan at 100% of your investment. If you can't do that, a loan like this can become very dangerous, especially if you don't have other income to support it if things go south. Good luck!
Did you end up buying your bungalo? I see you are in Missouri.
Me and my team have been in a buying frenzy in the blue hills neighborhood since the end of 2017. What neighborhood are you looking?
You should be really careful where you buy because some of those neighborhoods in KC are decades away from seeing any increase in equity.
Another cheap neighborhood on the up and up is around 60th and indiana.
Also go to community america credit union for mortgages starting at 30k! Spend 5k more and get a better property than a 2bd 1 bath
@Luke Fernandez Interesting thread. Yes, did you end up using that credit union loan and how did it go?
Thanks in advance,