Great Opportunity...Looking for the funds.

[Latavia Banks]

I have found a property that is available and seems like a great investment opportunity for me. It’s a duplex in an up and coming area in Huntsville, AL. Looking to purchase without doing owner occupancy. What would be the best way to raise funds for this investment?

[Latavia Banks]

@Latavia Banks Should I try a HML?

[Bastian Kneuse]

@Latavia Banks Have you explored if you qualify for a conventional loan?

[Dave DeMarinis]

HML is a great solution for any or all of the following.

1. Borrower won't qualify for traditional financing but asset will. HMS heavily weights the asset in underwriting.

2. Property won't qualify for traditional financing but you have a plan to rehab and/or tenant it and then it will qualify for long term financing

3. You need to close very quickly. A good HML can fund in 2 to 7 days.

However, in all cases you want to have a plan to refinance within 3 to 12 months. DM with the specifics and I can give you more help.

[Latavia Banks]

@Bastian Kneuse Yes, but the downpayment is the issue that I'm running into. I would look into an FHA, but owner-occupied is not currently an option for me.

[Bastian Kneuse]

Given where we are in the business cycle, I would approach financing very conservatively. Don’t overleverage. My recommendation is to save up for a down payment plus 6 months of reserves. 

[Caleb Bryant]

@Latavia Banks sounds like you’d want to bring on a joint venture partner who also brings some of the funds for down payment

[Latavia Banks]

@Caleb Bryant Yes! But in order to do this, I know that I must be able to bring something to the table as well. That is the part I’m working on.

[Peter McDonough]

The McVay property likely won't rent for >700 a side.  At 130k, it's not that great of deal....

[Michael Glist]

If credit is decent (640+) you should be able to get a line of credit that you can use for the down payment and closing costs to acquire the property. 

[Account Closed]

Is this your first investment property?  Most first time investors (and many seasoned ones) use private money to acquire and fix up the property (if needed). Plan on having around 20% to put down of your own money. Lenders look for FICO and level of experience, however, you don't need perfect credit or experience to get started. I am more than happy to answer any other questions you may have! 

[Matt P.]

@Michael Glist what kind of line of credit?

[Latavia Banks]

@Michael Glist I was told I could not do a line of credit for the downpayment.

[Latavia Banks]

@Cherine Lawrence Yes, this is my first investment. I think I will pass up on this and continue to save money and learn. I’m hoping that I’m able to buy my first place before my birthday in February. I would love to connect at some point with more lending questions.

[Account Closed]

@lativa banks Absolutely glad to help or lend any advice.  I know it can be a bit scary for your first property, but once you get one under your belt, it's rinse and repeat and you can have many in your portfolio if that's what you are looking to do! It's all about having the right contacts to make your dream happen!!!! Saving a little is a great idea. The more skin you can have in the game, the better position you will be in when you are ready to make an offer on a property. Message me anytime! :)

[Michael Glist]

@Matt P. There are a few different lines of credit you can get such as credit card stacking, a traditional line of credit from a bank/credit union or an alternative line of credit. The bank/credit union would be the best terms and rates but the credit card stacking would be the easiest to get approved for. 

[Michael Glist]

@Latavia Banks was it a bank/mortgage lender that told you that you cannot use it for down payment? If you are using a hard money lender they typically do not care where the funds come from as long as they are there. 

[Tim White]

@Latavia Banks

What makes this property a good deal?  If it is a good deal it relatively easy to find the funding for it.  I would recommend using one of the biggerpockets calculators to ensure that all the numbers workout to your expectations.  That includes holding costs, rehab, insurance, taxes, vacancies and the I didn't even expect this to happen expenses.

Based on the situation you described you would need to give equity in the deal or use a private lender for a portion of the transaction since you do not have a down payment for a traditional lender.

[Arturo Ceballos]

@Latavia Banks

I’m not sure about your personal situation but, I would find a way to purchase (conventional loan) the duplex and live in it. Set a solid goal for 1 year:

- Save as much as you can

-Read as many books as you can on RE

-make sure your personal finances are in good standings

- credit score

-DTI

Most HML or Privet Lenders feel more confident entering a deal when you can contribute more.