Financing New Properties

[Julie Sisnroy]

I recently found a deal for two homes, one has a steady renter and the other is vacant. The home for $30,000 has a renter who has no plans on leaving, the rent is currently $540/month. It needs rehab, but no reason to do it now. It has a ARV of roughly $60,000.

The other home is $36,000 and is being rehabbed with a ARV of $62,000.

After my preliminary analysis, I would like to purchase both. I don't know much about creative financing as I have always gone conventional or VA. My VA loan is tied up in another rental property so that is not even an option (plus can't use it if not owner-occupied).

I was out of work for almost a year due to a serious medical condition, so I am not sure if conventional is the way to go.

I also don't have a huge amount for down payment ($10,000) since I was out of work.

I also own another rental property that has about $50,000 in equity.

Question: Should I consider a HELOC or HE Loan for some of the financing? Or try to get approved the conventional way?

I don't know much about private lending. Can anyone help a newbie?

[Jassem A.]

that's not too bad. Advantages of a mortgage is usually a lower rate but also costs more in origination fees etc while HELOC has less fees and sometimes the bank will pay the appraisal. You could also see if the seller is willing to finance at a competitive rate with a large down payment which could bring payments down further.