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Updated over 8 years ago on . Most recent reply
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19 years old -- zero credit score. Creative funding ways? Father?
Hello BP. I'm currently looking at SFR in the 80-110k range as a rental property. Problem is, as a College student, I very recently just started building credit. At the moment, I actually have no credit score/history. Additionally, aside from a paid internship I have this summer, I do not have income. Therefore, I'm not the most attractive candidate to lenders. Let's be honest, they want nothing to do with me. However, I refuse to let this stop me from beginning my REI journey. Additionally, in today's market, deals are going quick. Time to act.
I recently spoke to a mortgage broker who recommended the following: My father, who has excellent credit history, has openly told me that he would love to support me as I begin this journey - given that I provide him with a certain return, obviously. The broker thus recommended that once I find my SFR, I have my dad be the one to buy it with a conventional 30-year loan. With his credit/income, he would easily qualify. Meanwhile, aside from managing the property, renovations, tenants, etc., I focus on building my credit. Once my credit is good enough - I'm guessing a year or two down the line - I BUY the house from my dad. I believe this is called a non-arms length transaction. I'm a little confused about what this part would look like, and was wondering if anyone could shed some light. What would be my options in acquiring the property? What would financing look like? Does the fact that we're father-son affect anything in the transaction? Could we just re-finance his mortgage, but sign me on and take him off?
Overall, any advice would be appreciated. I've read just about everything on REI, but never about this particular situation.
Thanks BP!
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@Ilan Szulik not trying to pursuade you from your dreams by any means. There are a couple ways like @Peter Vekselman said. Your dad can get a hard money loan, he can refi his personal property, he can give you a personal loan, he can co-sign on a loan..etc. if your dad was going conventional on a mortgage he can add you on title and then you can build up your credit and refi out of his name when your able to. Talk to more lenders..