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Updated over 5 years ago on . Most recent reply
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SFR homes to cheap to get financing, alternatives?
Hep BP peeps,
I posted a similar thread a few years ago and am back in a similar situation. Here in Northeast Ohio (specifically the near east side of Cleveland) SFR B/B+ rentals work great with the following model:
SFR: 3 bedroom 1.5-2 baths
Purchase and renovation: $60K to $75K all in
Rent: $1200-$1350/ month
Our Property taxes are very high so this nets us around $250-$350 per month after expenses and escrows.
My problem is finding financing for more homes. We are at our limit for traditional loans (debt to income limited). I have looked at all kinds of lenders and I can't find anyone will loan on a $40K-$60K purchase price. I've looked at bundling homes, but timing is usually an issue not to mention the extra cash, we like buying and stabilizing one at a time. We don't have enough equity in our portfolio for a line of credit and already have one on our primary residence. I can sustain a 7-10% interest rate at a 30 year am. schedule with a 75% LTV and still meet our model.
What other options do I have to get financing so we can buy more homes in this range?
TIA
Lincoln