I am trying to purchase my first property. It is a 26 unit apartment building that I currently work at and the owner is trying to sell it to me. I have looked at a couple different ways to fiance it and nothing is really working out because I don't have great credit. Because of this I can't get a loan for the whole amount. That being the case the owner has agreed to owner fiance but wants a down payment.
That being said, What are some of the best ways to get funding (with a credit score of 550) so I can pay him the down payment and then start to fiance through him?
*** Side note.. I talked to a good friend of mine to be a partner. After we crunched the numbers, we decided that it wouldn't be a good investment for both of us together because the business needs some fix ups and wouldn't profit a ton in the first few years. He wants something a little bigger. So funding coming from another partner may not be a option in this case.
With your credit score you have the option of wholesaling it. You could also look for an angel investor but, in all honesty with a 550 you will not get it.
With your credit score you have the option of wholesaling it. You could also look for an angel investor but, in all honesty with a 550 you will not get it.
With your credit score, you may have to be a little creative. See if you can get a private investor to go in with you and put up the down payment. Your investor might want a little more because they are seasoned and to them it may not be worth their time. A newer investor may have money and be willing to jump in with you just to get started.
I would also recommend visiting your local REIA. You have a lot of investors there that are ready to put their money to use. You may be even able to find a mentor along the way.
@Dane Delatte If the numbers don't work out, don't try to make them work out for you. If it's not a deal, it's not a deal.
I would concur with @Michele Wax to wholesale it, IF it make sense to someone else for someone else. I would recommend getting connected to a local REIA group and find out who might be looking for a 26 unit who would be able to invest the money to fix it up.
If anything, let it be a learning experience for you. Don't get tied up with trying to make it work when it can't. There will be others to go after and will make perfect sense to make an offer on and close.
I completely agree with @Michele Wax. Without a good credit, funds and experience, it will be close to impossible to finance this deal. You can try to find a partner and give away the major portion of the equity, but then your interest in the property lowers significantly as well with the loss of equity.
Thanks to everyone for the information. I want to get into Real Estate really bad and I know this place is the perfect place to get started. I have been managing the place for the guy for 6 years now and I know it has great cash flow and makes good money. I guessing my only hope is he holds off on selling it until I can get the money but if not I can move on to something else. There's money to be made in other place also. Thanks again.