All Forum Posts by: Tanner Cohen

Hey Zach,

It sounds like you're caught between a rock and a hard place. But you are exactly where you need to be, now it's up to you to put in the work to get to where you want to be. As a Private Money Lender with experience working at a conventional lender, you either need to have enough verified income or verified liquid assets. If you have neither, focus on building your income outside of real estate investing 1st and the capital will follow as a result. If you have a decent income, but your credit is poor my recommendation is to look for an FHA loan and start with house hacking. You'll only put around 3.5% in down payment but you'll have to live in the property for at least a year and you'll need a 580 FICO to make that happen. This is your best bet to enter the space as a 1st time investor with no experience, no capital, and poor credit.

If you don't want to go the HH route and desire to have this be a pure investment play, then you will need a business partner / to Joint venture with someone willing to be on a loan with you so that you can use their credit and your combined assets for qualification. Then you may have a shot at 100% financing, but that is still not guaranteed. 

If this is just you, For someone in your position with no experience at this, you will not be able to source 100% financing. Most lenders do not lend 100% of acquisition, my company is only comfortable lending up to 90% of purchase but that's not to exceed 80% of value. See what i mean? Only a handful of lenders are willing to expose themselves to that level of risk and there are compensating factors for why... most likely being experience and assets, which you have neither. 

I am not here to shoot down your dreams of breaking into the RE market, but what i am gathering from your post is that you really are a brand new real estate investor and you do not have enough time in the space to know what you can and cannot qualify for. Keep talking to lenders, realtors, and other real estate professionals and get acclimated with the industry terminology. Keep looking for those good 1st deals and running them by the lenders you've made contact with to see what they'd be willing to lend you. Keep working on building your credit, saving money, and iron out your business plan and strategy so that lenders view you as an attractive investment. 

Again Zach, you are exactly where you need to be and the fact that you are open to suggestions and looking for feedback is a great indicator to me that you will be successful at this. Stay hungry, you'll be just fine.

Hey Suduk, 

You can get a Renovation loan from Fannie Mae @ around 5% down and it will be a similar process to getting a conventional mortgage. You will need to verify income amongst a few other things. Or a FHA 203(k) loan if you cannot qualify for conventional. If all that is too much you can also go with a Hard Money Lender or a Private Money lender. Either will be able to give you a loan based on the current value of the property (mid-rehab) and fund all of your rehab - both LTV & rehab loan will be determined by your experience, credit, liquid assets and how you hold title. Some will lend off ARV, while others will not because of current status of property. hard / private money will have lower leverage and higher interest rates. Hope that was helpful! :)