Can I make this happen?

[John Johnson]

My mother and father went through a divorce a couple of years ago. My father moved to Tennessee and my mother has since remarried. I live in the house that they used to live in (it is owned by my mother). It is worth about $160,000 and could be worth nearly $200k with about $10K in repairs and upgrades. She is willing to let me purchase it for the payoff, which is about $55,000. My father owns a piece of property across the street which has a mobile home on it that rents for $400 a month. He is willing to let me have it for $25,000, it would go on the market for about $38-40K. I had a bankruptcy about 3 years ago, and have slowly been building my credit. I purchased a new truck in 2008 and have my payoff down to $11,500. I also have about $9,000 in other debt for a total of just over $20,000.

I could purchase these properties and pay off my truck and other debt for about $100,000 and instantly have $100,000 worth of equity.

My credit score is about 600 and rising, mostly because of the bankruptcy and lack of accounts. I am drawing unemployment which about $1,700 a month. I have been receiving benefits for almost two years. I was a Sales Manager for for Fortune 100 Company. I went back to school for a year and have recently found myself back in the job market.

What I would like to do is obtain about $60,000 to start a small car lot with about 12-15 cars in inventory. About $40K of the $60 would be inventory purchased at wholesale price. $10K would be cash in a reserve account and the other $10K would be for dealer's license, insurance and other initial expenses.

If I were able to purchase these properties for $80,000, payoff my truck and other small debt for $20,000, receive funding for a car lot of $60,000 my monthly payments would be less than what I am paying now.

Do you know of anyway that I can make this happen in whole or in part?

[Joel Owens]

You won't find any lender or private money that will loan out that equity to you.

I do know investors with millions in cash that loan out on properties.

They loan to people that have the properties literally almost paid off and want to cash out some.

Example a house with recent appraisal in the last month is appraised at 800,000. 200,000 is owed on the property.

Investor loans 200,000 and secures first position with payoff of the first.They set a high interest rate and if the borrower defaults and they foreclose the lender will easily make the money back plus a fat profit.

It depends on each states lending laws and foreclosure process on what you can and can't do.

You could find someone who might lend the 60,000 with a high interest rate if the house is really worth 150,000 today.

There is not as much risk there in that the lender can foreclose and quickly sell the property to recover costs.

With your track record you aren't going to get a loan for a car business.

My brother has had his own used car dealership for over 20 years in Georgia.

He buys all his cars at private auctions not open to the public for dealers.The rookie dealers always want to bid on the running vehicles which is a mistake.

You see they rig the cars to run at auction and then when the dealers take them back to their lot to sell they overpaid for a piece of crap.

The dealer finances this piece of crap with some money down and a high interest rate.Most of these buyers live paycheck to paycheck.So when the car breaks down the lot has to pay a repo man hundreds of dollars to recover the vehicle because if they can't get to work they can't make money.

The lot try's to sell the car again and finance and keep going that way.

My brother takes a different approach.He goes to the dealer auction and buys the "no starts".

Usually gets them for 300 to 500 bucks.Puts all new hoses,belts in and takes and puts a new tranny and engine in if necessary.Usually might have 1,500 to 2,000 in it and sells for 2,800 to 4,000 depending on what make and model and year it is.

By him working the car top to bottom he sells them for cash and gives a 1 to 2 year warranty on them and will fix things if they have a problem.

This way he knows what he is selling instead of something rigged to run at the auction.

He usually sells about 100 cars a year.Most of his cars he sells around tax return time.People wait for their returns and save up some cash all year to add to it and then pay cash for his cars.

In 30 to 60 days he sells about 75 to 80 cars at tax check time.

This way he gets all cash and doesn't have to worry about repo.He also builds a rep of selling quality vehicles with a warranty and whole families buy from home.

Makes a very nice return for him and his family.