Is Buying This Duplex Possible?

[James G.]

Hi BP. I found a duplex for $75k that I really like, and the numbers work out perfectly, but there's just one problem... I am a college student with no income, so the banks won't give me the time of day, and it would be hard to refi out of a hard money loan with no income. I really want to buy and hold this one rather than wholesale it, do I have any options?

I've thought about partnering, and I found a partner who was willing to put the $15,000 down, but he wants to know where the debt and security was coming from. Is it smart to get a hard money loan? Will I be able to refi out of it? Can my partner do anything to help me while still splitting the deal ? (He has money)

I guess the ultimate question here is, I want to buy and hold this duplex... What are my options?

[Brian Schmelzlen]

As Caleb said, you would need a co-signer for the loan.  If your potential partner will fill that role, it makes the partnership more valuable to you.

In regards to "is it smart to get a hard money loan", if the numbers make sense you and don't have better options.  Hard money loans are not cheap, so if you are able to get the money from another source that is smarter.  If you are not able to get the money cheaper, and even at the hard money rates (under a pessimistic scenario where everything is over budget and takes twice as long as you expect) make sense, it is a smart decision.

You also said that you have no income, but you are a wholesaler.  If you have been actively wholesaling, you have income even if its not W-2 income.  Banks simply want to see that you have a history of self-employment income (generally 2 years) in those cases, but shopping around you might find a community bank willing to bet on you.