All Forum Posts by: Gordon Olson

@Wren Martin Thanks for thinking of me, Wren.

Wouldn't I still need to get pre-approval though before I can do any of these?  I've already considered wholesaling as I know it can be pretty lucrative. But in either case i can see where the experience gained in lining up properties for someone else to flip or flipping them myself can be invaluable. 

@Wren Martin

Thanks for the addtional info, I appreciate it. More precisely I AM trying to house hack with my 1st property. The challenge I'm having is with the whole credit situation. I MAY be able to get a mortgage through my credit union but I cannot currently afford a 4-5% down payment, let alone a 10% down payment. In contrast a private lender's interest rates wouldn't be helpful either over a span of months let alone years. And depending on the type of loan (conventional vs. FHA which my credit union doesn't offer) I still have to have a sufficient credit score to even prequalify at this point.

I'm not discouraged though. I'm just expecting there to be a way finance a deal SOMEHOW. I just don't know how yet. So how practical would a private lender loan be in a case like this? Any other suggestions? Thanks all.

Originally posted by @Mike McCarthy:

@Gordon Olson it’s slightly different from what you’re asking, but I would do everything you can to start building credit. Get 2 credit cards and use them for EVERYTHING you buy. Pay them off every month, on time and in full. In 6-12 months, you’ll end up with a decent credit score that a bank will help you without a problem.

In general, you want to stick with conventional (bank) mortgages. They are subsidized (or at least backed) by the government, which means you will get better interest rates (4.5%). There are also programs (FHA) which allow first time homebuyers some extra perks (5% down payment, etc).

Private lenders are looking to make money (obviously) and won’t be able to give to the same rates and perks a government backed mortgage will. They of course have their place too - and for things like flipping, commercial properties, etc - definitely worth pursuing... but I’d say not for a home purchase or first rental purchase.

Thanks Mike. I am perhaps a bit impatient to get going so I haven't really wanted to go this route. But at least my realtor friend had already made me aware of this and your mentioning it makes me take it more seriously.

@Wren Martin Thanks Wren! All new and good stuff to know. :D

@Wren Martin
'A typical SFR house Flip in my area is usually 2-3 draws.' What is meant by a 'draw' in this phrase?

@Wren Martin Thanks for that. Not exactly the same question but then how exactly are most of these deals structured? How many months for terms? And what usually are the term conditions?

Anyone's feedback is appreciated.

I just started reading the BRRRR book by David Greene. MIND BLOWN! Up to this point I had only considered the traditional way of borrowing money through a mortgage company.

I am a newbie and am looking to not only purchase a property but to buy my 1st home as well. Thing is, and I'm sure I'm not alone due to my credit situation (meaning since I've previously paid cash for everything for almost 30 years and don't have a BAD credit score, just NO credit score) it isn't likely that I'm going to be getting any kind of loan via mortgage lender anytime soon.

I get the idea of paying cash so a private lender seems to be the best option for me. But what kind of criteria are we talking about here? And in exchange for their lending me the money what do private lenders get in return? @David Greene- you can just tell me to keep reading if this is covered later in the book and that will be end of it. Otherwise, any feedback on this? I am working with a realtor but it looks like I need to get the funding 1st before I can really tell him what to look for. Thanks for any help anyone can give. 

@Pavel U. Yup, I saw that. I was looking it up on YouTube and I saw the clip saying that Mpls. reinstated the ban on discrimination in June.

@Naima Farah while I see you responded to David's comment I don't see comments to my initial questions. I'd like to know what you know about these please if you care to comment. Thanks.

One more question relating to this: what if the rental side of a duplex with an attached garage has a door to the garage? How would I ensure tenants don't secretly attempt to put stuff in the garage without my knowledge? Can I make what I believe amounts to illegal storage a condition of the lease and evict them if they do? And if they are storing items in violation of the lease do I have a right to keep their items instead of the 28 day holding period? What's to prevent them from attempting to do so?
I thought about if it's possible to board up this door too but I don't that that would work very well either.