FHA loan for first property

[Michael White]

Hi guys

Have recently moved over to LA from the UK and am looking to get started in real estate out here.

Have little in the way of capital i.e. 10k and no credit score (not transferable overseas). However, my wife has 750 credit score so we aim to use her name for the first couple of properties.

I was wondering what people's thoughts were on FHA loans for a first investment property? i.e. pros and cons? As I understand it, there is the potential to put as little as 3.5% down (when purchasing mortgage protection), but are there any different stipulations for investment property as opposed to one you intend to live in? Would be looking somewhere further north such as Fresno/Bakersfield etc. where prices are much lower than LA.

Thanks in advance

[Daniel Fleming]

Michael,

Have you looked into using a private money lender? They are typically more flexible / creative on how they can fund deals for folks in your situation. Because the loan is secured by the asset (property) credit takes a back seat, and some private lenders will allow you to pay the loan origination points on the back end of the rehab/refi so little to no money needs to be brought to the deal (for the right deal). With your spouse having great credit, you should have no problem refinancing the rehab loan out to a fixed rate mortgage. (assuming she has steady income)

Bottom line, when you work with private money lenders, you get more flexibility in regards to terms and creative funding options.