House is $250k, fixer-upper, lowball, finance options?

Question

House is for sale at $250k very much a fixer upper... I know I can throw a lower price at the bank for the house but I’d like to know my financial options for the deal, have little to no money to invest... banks won’t deal with me (young credit, somewhat low income) anything i could do? Recommendations ?

Diana Muresan · Answer

@Matt P. pre-penalty is not allowed on conventional market, you can refi or sell after the renovation. Otherwise you would not be allowed to refinance either, correct? Bankers can loose their commission if a borrower doesn't make at least 4 payments, but legally you cannot enforce that, you can only hope borrower will not refi or sell before that. That goes on all purchases, not just reno loans. A borrower is free to refinance 1 day after the closing, not ideally for us of course, but they can

@Edwin Mora all loans on conventional, government or subprime market takes DTI as part of the factors in qualifying

Grant Rothenburger · Answer

@Edwin Mora You may be able to use a hard money lender

Edwin Mora · Answer

@Diana Muresan

For the Fha loan, do they consider my dti ?

Matt P. · Answer

@Diana Muresan Isn't it mortgage fraud to buy a flip with an owner occupant loan and no intention to actually live there after you rehab it?

Diana Muresan · Answer

@Anager Reynoso that’s incorrect. You can purchase an INV property without owning other properties, some lenders have overlays that don’t allow first time homebuyers on INV but not most of the lenders.

@Edwin Mora you can do it as owner occupied, you are free so sell after the reno, you can also do it with partners as an investment with 15% down

Edwin Mora · Answer

@Diana Muresan would I have to apply myself as the occupant of the house, In order to do this? I was looking into it and it definitely sounds like something I could do for myself in this case

Diana Muresan · Answer

@Edwin Mora can you do it as owner occupied? Then do a 203k fha renovation loan with 3.5% down or FannieMae with 5% downpayment. Build all your closing costs under seller concession

Edwin Mora · Answer

@Anager Reynoso

Hello!

Yeah most likely what I’m going to do is partner up with someone I know who invests, thank you for that information though, definitely puts some clarity in how to strategically place my business

Anager Reynoso · Answer

@Edwin Mora

Hi!

Most Lenders want to see if you own, at least, your primary or one other investment property prior to getting a loan for a small investment property. However, if you don't own another property, you can see if you can get a partner with good credit and who owns their primary. Feel free to reach out to me!

Edwin Mora · Answer

@Scott Jensen yeah that’s a good idea I actually have a couple of people in mind to partner with on this deal, thanks for the advice