CAN I GET SOME HELP ??? Please

Question

hello everyone, I am attempting to buy a duplex to owner occupy 1/2 and rent out the other 1/2. I spoke with a lender to get pre approved for a FHA loan but my debt to income ratio is not the best. And I also attempted to get a co-signer.... Which also didn't work because they already had a FHA loan themselves. The lender seems to not want to offer any info help on what to do, so I'm hoping I can get information and suggestions from my bigger pockets community. Can I buy a duplex with owner financing ? How do I do that? Basically, my situation is that I can't get approved for a loan and I need other options. Please help ... Thanks BP community ! :)

Jake Thomas · Answer

You can only buy a property using seller financing if they (the seller) are willing to do that. You can ask but if this deal was on the MLS the chances of that are not as good.

The other solution is to work on getting your DTI ratio better by paying off whatever debt is holding you down. Or you can get a better higher paying/second job.

I don't have a more complicated and less realistic answer for you other than this. Sorry but a lot of people have been in a similar situation. You might be able to increase your DTI in as little as 2-3 months if you start working on it now. Be patient there is always another property out there when you get pre-approved.

Frank Lewis · Answer

@Marcus Martinez Would it be too personal to ask why time isn't on your side? If time is short, than a hard money lender may be your best option. Then you may be able to work on your personal finances and refinance the hard money loan to a conventional loan before any balloon payments (if that is included in your terms. I have heard of some hard money loans that are amortized over 30 years). There are options, you just have to explore them and see what works best for you. Finding a partner is another option, or even wholesaling this property so that you have some cash for your next property.

Jean-francois Ndomb · Answer

@Marcus Martinez if time is against you,  as though it ever is on someone's side, you should look for other ways to raise cash in real estate. For example, whole-selling , dog-birding for a local cash buyer, look on Craigslist what comes up and keep looking, daily, twice or 3 times per day ( i am sure you have a smart phone and check your Facebook more than you check for deals online). There is always deals out there. You might not get the big ones at first, but it doesn't mean you wont get a Lil cash out of a few others. Just don't  frown or hang your head, no one who wants to be successful ( you clearly seems motivated to do the work) has time to focus on negatives. Keep positive, try ever trick in the REI books do not take your eyes off of the price ( your first duplex).

Mohit Madaan · Answer

To add to this, you can borrow from family & pay of the debt. The debt to family shouldn't be considered in your DTI ratios.

Mohit Madaan · Answer

if i was you, i would start eating less, wear same clothes and drive less, perhaps sell a car (if it's exotic enough) and buy a cheap one. Pay off one debt at a time, starting with debt at highest interest rate first and going down, or you can use Dave Ramsey's method of paying of smallest debt first (kinda illogical but works for tons of people). Oh and don't forget, extra job will do two things, decrease Debt to income, plus you can use extra cash for debt payoff or down payment.

If you still fall short, you can always sell couple of bottles of blood a month or/and if you still have any energy left, get a third weekend job.

I honestly would do all that, not because i want to get into my own house so bad, because getting my first property will give me the taste of blood that real estate investing is. This will change you life and family tree forever, if you do it right and repeat it over & over.

I still remember when i was 18 and was running around looking for electrician at 2 Am (long story)

Marcus Martinez · Answer

thanks buddy @Frank Lewis

Frank Lewis · Answer

@Marcus Martinez well good luck to you, definitely look up and explore all possible options. Be sure to post your journey!

Marcus Martinez · Answer

@Frank Lewis my sister and I both live together, and our apartment lease is up pretty soon and She is moving after its up. Therefore I will need a place to live.

Marcus Martinez · Answer

@Jake Thomas @Mohit Madaan    I also forgot to add that time isnt really on my side. so waiting a few months to balance my DTI to be capable of loan approval may not be one of my options. @Jean-francois Ndomb @Jesse Chunn @Frank Lewis

Frank Lewis · Answer

You may also want to look into other financing options. You mentioned owner-financing, have you looked into hard money lenders to see if that would be an option for you? I would agree with the previous posters that tackling some of your debt is also a great idea.

CAN I GET SOME HELP ??? Please

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