Don’t qualify for traditional loan but have 40k saved

8 Replies

I have saved 40k of money that I would like to invest to start in my real estate career. I am in an interesting spot where I don’t qualify for traditional loans and am asking for advise on what my options are for my future.

Here is a brief summary of where I am at:

I have a degree in Mechanical Engineering and specialize in working and operating shipping vessels where I worked for a couple years. I then took a year off work to learn more about real estate and get hands on experience with the construction side. I took my year off because I had an investor who I was working with and wanted to flip homes with me, but through COVID he backed out due to uncertainty. This year (Jan 2021) I currently moved and work on a ship in Bay Area, California.

I work on ships where I am able to live on them rent free. I worked hard and have bought everything cash and have not built enough credit lines to get a loan from the bank. (I have two lines of credit that they will except. Car insurance and a credit card payments)

@Scott Westlake

Here is the finish to my Post (didn’t mean to post it yet)

I am looking for advice on what my next step should be. I would love to fix and flip a house with all the skills I have built up but I don’t have the money myself for this. The Bay Area is quite an expensive market alone..... also is it worth investing around here with the market so high?

Any ideas on what a smart next move would be or a good resource to direct me towards my next move?

@Scott Westlake . Have you considered long distance investing? Read David Green Long Distance Investing book to get started. We began our real estate investing journey a year ago and found long distance investing to be the best fit. If you don't qualify for a traditional loan maybe consider partnering/participating with a merchant cash advance company to grow your funds monthly. We are currently looking for rental #4 but have been outbid everytime. Not stressing or compromising my numbers due to the profit we get from those reserves.

Thank you very much for the Idea of considering Merchant Cash Advance, I have never heard of that option! I got the book Long Distance Investing by David Green to help learn what other options are out there but I don't remember this as an option. I have a lot to learn, and it is awesome to hear there is even more options than what is in the book. Thank you very much for the suggestion!!

Also that is exciting you are on looking at rental #4! I can't wait to be there one day also.

There's also the option of a debt-service coverage loan. You would want to buy a property that would cash flow after the mortgage payment and that is how you qualify. No income docs needed. Feel free to DM for more details.

@Scott Westlake

The BP community has had some great suggestions here so far. I notice that you say that you would love to do a fix and flip. If this is the case, then a private lender or hard money lender could definitely be an option for you as they would be more concerned with how good the deal is that you’re fixing and flipping (if you find a great deal) than they would about your personal financial or employment situation. I think the HMLs get a bad rap, but can be of real value in instances where someone with a little cash and a lot of know-how can use private or hard money lender funds to bridge the financing gap on a great fix and flip. Best of luck to you!