Advice on first buy with low funds!

[Cory Anderson]

Hey guys! I'm sure this has been asked in the past and I have read a few threads that help but just thought it would be better to ask and get your opinion on my specific situation.

I am wanting to buy my first single-family rental property this year and need advice on loan strategies. I have some really good opportunities in my area to buy great homes for little money and rent. They typical property I'm looking at is 3/1, 1000sq.ft. brick rancher, 1960's - 70's, asking $35k - $50k depending on the situation. This particular house would rent for approximately $800 in this area. I have done my homework and feel very confident that this is a good investment for me to start with.

The problem is, I have talked to some of my mentors who have been doing this for a long time and they said, typically, the banks/credit unions in this area want 20%-25% down for an investment property. I am 28, been married for 4 years and have a 7 month old daughter and do not have $10k - $13k just laying around to buy one of these properties. I make decent money and feel confident that I could cover the mortgage payment for a few months if need be but if would take me quite some time to come up with that kind of money to put down.

Any suggestions??

[Troy Fisher]

Originally posted by @Seneca Hampton:

If you found a HML you'd be able to only put down a few points (3-4 in your area I'd guess) put someone in the home for 6-12 months, THEN head to the bank and get the home refied. Not the cheapest in the long run way but a work around for those itching to start with low funds.

Ack! I too like to be contrarian to most people. But I would never suggest to purchase a property with Hard Money to someone who doesn't have enough money. 12-15% with 3 or 4 pts! That's real expensive, and then when he gets in and discovers that there is rehab to be done, a water heater to replace, rot in the subfloors he's sunk.

Besides most of the HML I know require at least 6months reserves and 10-20% down too.