A few things:
- First, you say:
"It is now possible, if not easy, to buy property with "no money down" that will more than pay for it's self. This is doing it the right way, not over leveraging yourself into a hole if something bad happens."
If you are purchasing with "no money down," then by-definition you are 100% leveraged on the property. No that this is necessarily bad, but you can't have both "no money down" and unleveraged at the same time.
- You very likely won't be able to get business credit for your company if you don't have at least 2 years of income tax returns for the company. Additionally, unless you have a good bit of REI experience (you don't), lenders aren't going to just hand you a line of credit to "give it a try."
- You're unlikely to get a commercial loan until you've proven that you know how to do whatever it is your going to need the loan for. Again, without experience, you're in a bit of a bind.
- Now, even if you could get a commercial loan or a business LOC, without the company having a credit history, you'll have to personally secure that credit line. With a high DTI, you're unlikely to qualify for any reasonable amount of credit.
- If your goal is to replace your income, that means you're likely to be leaving your job to do this. Which likely means your income will be going away. In today's credit market, there's little chance you'll qualify for a conventional loan without verifiable income, so even getting traditional mortgages against 4 properties is going to be tough without a co-signer.
- Without any money to put down, you're unlikely to get traditional financing, hard money or rehab money in today's credit climate. Each of these lenders are going to want to see some "skin in the game" or at very least, some experience.
- Get your credit in order. Get your DTI down. Without decent credit (620+), even most rehab and hard-money lenders won't touch you. If you can find a *killer* deal, you can probably attract cash, but given that you're inexperienced, it will be harder without decent credit.
- Buying apartments means you'll need fewer loans, but unless you are really prepared, you probably don't want to make that leap without cash or experience. Plus, these days, you're VERY unlikely to get commercial financing without at least 20-40% down payment.
So, what options does that leave you with:
- First, you'll likely need to find some cash (either your own or a partner's). Without it, your only real option is creative financing with sellers, which can be pretty tough these days when most sellers are upside-down on their mortgages (and hence why they're trying to sell).
- Find credit partners (people with credit) who will put the property loans in their name, and give them a % of the profits (or a fixed amount) for their "partnership."
- Find private money (hard money) or a rehab lender who can cover both your acquisition costs *and* your rehab costs. These loans will generally be short-term (6-18 months), but will give you the short-term cash you need to get the property either sold or cash-flowing. If the goal is to hold them as rentals, you'll need a way to refinance into a fixed loan in 6-18 months. See the part about credit partners above.
My biggest recommendation is to not quit your day-job until you have a plan for all aspects of the business, including (and especially) the financing...
