Updated over 10 years ago on . Most recent reply
Private financing.
So a RE agent called me to offer me private financing. He works with a group of investors. But their terms are a 5.5% fee of the sell price, 10% down, and 10% interest. It is expensive, but with this financing, I plan to buy a duplex for under 100k. Each side will rent for around $600.00. My question is if the private finance is worth it? I have the cash for the down payment, and since it is multifamily I feel like it will be worth it since I don't think a bank will lend me at the moment.
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Can it cashflow at a 10% rate? Have you heard of BRRRR? Buy, Rehab, Rent, Refinance, Repeat.
The issue is that if something needs repair, let's say the roof or a major mechanical system, do you have the money to cover it?
You say you are between jobs, what are your prospects? You can't get a loan without a job. You can't get a loan without two years of tax returns if self employed. Unless you go with a portfolio lender.
Really, it seems like a recipe for disaster. Low funds, high interest, no job and bad credit. I would concentrate on repairing the credit and getting a job, then start looking for deals.
