All Forum Posts by: Jason Morgan

Good morning BP,

I have a question, I have been looking for 30 year rental property loans. I attend my local REIA group every month and was told I would need 20% down and a credit score of 630. In order to come up with the down payment I sold my personal residence, I now have the 20% down.

I contacted the rep who worked for the hard money lender who does 30 year loans and they said my middle credit score was below a 620. This was strange because when I sold my house I got pre-approved through a traditional bank to buy a personal property, I am currently renting and would rather buy investment properties before I buy a home to live in. 

I took the lender/rep at his word and said I would apply at a later date and check my scores in a month. I am currently signed up for a few of the credit monitoring services so I got an email and I checked my scores and they were 657 TransUnion and 661 Equifax. I told this to the lender and they said they still can't extend credit. 

Do you need an excellent credit score, 720 or above to get rental loan? I would think buying with 20% down and holding and not flipping would be a lot safer, why is it so hard to find a rental loan? Any suggestions?

I'm looking to partner with an out of state investor who is in a market where the price to purchase homes has become cost prohibitive (I.e. California, New York, etc). I am located in one of the most affordable realestate markets in the country where the population continues to grow. Please contact me about networking and partnering opportunities where I will do the work and give you a great return on your modest investment.

Jason

770-815-9042

Thanks guys for all the great advice. I guess this is a mass reply because I can't find the button to reply to each post. BP is a great brainstorming method to figuring things out.

Good afternoon BP,

My question is I am having a difficult time getting funding to do rehab deals. I've attended my local REIA for the last two years and cultivated a small network of private money lenders. I was always told by these people and the guru trainers, "find the deal first and the money will follow". So that's what I did, spent a ton of money on bandit signs, postcards, mailing lists, postage, $400 on a direct mail copy writer to write my copy. Harassed my realtor to continue sending me listings and making offers, I did find one gem, fantastic deal but it fell apart because I couldn't prove that I had the money (pre-qual letter/proof of funds).

1. After I found the deal, I went to my first private money lender, sent him all the info on the deal and he confirmed it was a great deal. The problem was that he could not fund the deal because his money was tied up. Reached out to my second private money lender and never heard back from him after multiple attempts. My 3rd private money lender ran out of money as well and wouldn't be able to fund the deal for another 3 months, maybe.

2. Hard Money: So after unsuccessfully being able to secure private money, my private money lender referred me to a hard money lender. After speaking with him I realized that I didn't have enough cash to do the deal with him. He wanted 5pts, 15% interest and 20% down. My private money lenders wanted 3pts and 12% and would fund up to 65% ARV so if I got the property at a steal of a price no money down would be required. So the hard money didn't work.

3. Large Investor Lenders: so I go back to my local monthly meeting at my REIA and they do the rounds where the business associates talk on stage and one lender stated they do 65% of funding ARV and just points. So I submitted my application and was approved, he then asked me for my checking and bank info before he could finalize and get me the proof of funds letter. I submitted my checking and savings account which had about $4,000 in it and an investment account that had around $9,000 in it. Submitted on Friday and he said he would get back to me on Monday. Monday no call, Tuesday no call so I followed up with an email. He was always responsive on previous emails but this time nothing. So I called Wednesday and left a message. Sent another email on Wednesday, called again on Thursday no answer. I then called him late Thursday on my home phone(which he didn't have saved) and he answers immediately. Says he wasn't giving me the run around and gave me some double talk about the underwriter has been gone and once he gets back he will review it.

In conclusion, of course I lose the deal because I still have no funding or a pre-approval. I think it's horrible advice to instruct newbies to find a deal without getting financing on their first deal but that's what the industry teaches and it never made sense to me. Who shops for a car or house without knowing what they can afford? Any suggestions on how someone new gets money to do. Deal?

Thats a great offer,
From my perspective, so I'm assuming my private lender would okay this and just give me the cash to do the rehab? Doesn't this mean the seller needs to sell me his entire house for $2,000 for me to get the deed to be able to start working on it? I don't know of anyone who would suggest rehabbing a property until you have full ownership? Can you walk through the steps on this one? How would I take ownership of the property with just giving the seller $2,000 up front? Thanks.

Good evening BP, I have a question, If I can get a seller to take 60% or less of the ARV and also subtract repairs, is it possible as an incentive to get the seller to accept the offer that I tell the seller after the home sells I will split the profits with him in exchange for him taking a low price? Example, ARV is 100k, 10k in repairs, I offer $40,000 to close in two weeks. Fix up the property and I'm all in the deal for $55,000. Sell the house for $100,000. 45k in profit, give the seller $22,500 after I sell the property months later. Is that possible? I'm thinking it is and just wondering how to structure it. I've never heard anyone mention this as a strategy to close more deals but it seems to be a great way to get sellers to take less on a wholesale deal.

That looks like an out of the country listing service, I was hoping for some advice on how to find an investor from Alabama, specifically Taledega that I can wholesale the property to. How would this site help?

I have a question about an out of state property that a seller wants me to buy. I currently live in north Atlanta and that's where I have began marketing. I had a seller call me a few weeks ago that lives in Atlanta but they have a property they want to get rid of in Taledega Alabama. The seller is motivated because the house has been vacant for 6 months. It's been vacant because the home was flooded. Another problem is the seller doesn't have any pictures to show me and it's really difficult getting comps on this property. I tried to look up investors in Taledega AL and had no luck finding any. One called me back but said Taledega is not a growing market and he doesn't invest there. This seller is motivated and sounds really flexible on her price, she started at $25k but seems even more flexible when I recently spoke to her. I have talked to one of my local investors possibly trying to wholesale it to her and she told me doesn't buy flooded or fire damaged properties ever. Any suggestions on how I can find a buyer in AL to wholesale this property? Jason

Good morning BP posters, I had a question about doing a subject to. How much are typical closing costs when doing a subject to and is it possible to do a lease option first and put in the lease option the seller has to give me the option of selling the home subject to the current mortgage staying in place? I ask the question because I am mainly focussing on doing lease options but what if the seller doesn't have the cash to fix up the place, minor stuff like painting and carpet and if I have to use my own money to get the lease option rentable, I'd want to get a subject to rather than a lease to have some ownership of in putting money in before I even have a tenant. How I would present this to a seller would be an initial lease with an option to buy. I would then go over with the seller what the needs to be fixed up to get the place rented. If the seller balls on spending the money I could transition to doing a subject to but if most of my cash will be spent on doing renovations I would like to delay the closing because I would need to build up more cash for closing costs. Your thoughts?

Thanks Justin for the advice and accountability offer. Could definitely use help with staying on track.