100% financing

[Nick Stone]

Hello BP community,

I just wanted to run something buy you guys to see what you think about it. I have found a 3/2 that is somewhat in a flood zone( it flood back in 2009, as did half the state). It's owned by Freddie Mac and posted as $41k. Last week it was $48k. Everything on the inside looks good. The sheet rock has been replaced all the carpet pulled up. It needs about $3-4k to get it livable again.

Now my credit is not the best, plus if I use conventional lending I would have to get flood insurance. I was thinking about making a $20k offer and see what they said. I would ask $30k from the lender to cover closing, repairs, and 2-3 months of payments. Then I would put a tenant in there for about $800 a mOnth, which is medium rent for that area. Would a lender finance me 100% for about 5 years? And do you think it's a good buy and hold strategy? Some house on this block sold for $13k and a block away for $70-80k. I would greatly appreciate some feedback from the BP community. Thank you for your time.

[Patrick L.]

Originally posted by Fran Flanagan:

Considering that the place flooded in the last 5 years, I think that it would be silly to not have flood insurance, regardless of if it's required or not by your lender.
If you're short on cash now, and your credit isn't the best, what is your plan for if the place floods and causes ~15k in damages with no rent coming in?

Well his plan was to put none of his own money into the deal so I guess at that point he could walk away unharmed and stick the lender with the trashed property......which is exactly why nobody would lend 100% on a deal like that.