All Forum Posts by: Trevon Peracca

@Trevon Peracca, Semper Fi! That's even better. I actually got started when I used my VA loan with zero down when I got out of the Corps. If it's less than 5 units you could use it here, otherwise it'll be tougher.

Do they allow you to buy in an LLC with a partner? I see that pretty frequently. Either look into that or possibly another lender.

What about borrowing against your own 401k account for the downpayment? I'm not an expert in this, but I believe you can borrow 50% of the value, up to $50k, which wouldn't cover the full 25% you need but would go a long way towards it.

see if the seller will carry back a 10-20% loan. You may have to use another bank but I've quoted deals in the past where a bank will lend 75% and let the seller carry back an additional 10-20%. 

It's tougher to find but certainly doable. 

The only product that I know you can get 0% down with is a VA loan. All other products require money down.

The real strategy OP needs is to find a way to buy the house without using bank funding, then refinance after ownership (through a cash-out, or delayed financing). This is the creative strategy you are looking for. Find a way to finance the home through hard-money, private lenders, or cash. Once you own the unit, there are some financing options that open up. Find a lender that knows this process BEFORE you purchase so you have everything lined up and not jumping in blind.

If this is your first rental, there is slim to no chance in getting a conventional loan on rental with 0% of your own money. sorry to say but no one is going to trust a new investor with 0 skin in the game.

You almost always have to throw your own capital at the first couple properties you buy in order to build credit with lenders.

if you really want to do 0%, you would have to get that from friends or family/have a co-signer

If this is your first rental, there is slim to no chance in getting a conventional loan on rental with 0% of your own money. sorry to say but no one is going to trust a new investor with 0 skin in the game.

You almost always have to throw your own capital at the first couple properties you buy in order to build credit with lenders.

if you really want to do 0%, you would have to get that from friends or family/have a co-signer

@Trevon Peracca

LTV on a purchase is defined as the lesser of contract purchase price or appraised value. If the contract says $150k and the appraisal says $500,000,000,000, it's a property with a market value of $150k. Period.

LTV is the correct term. "Value" in this case means market value, not whimsical value. No new acronym is needed for LTV. If someone is willing to sell at $150k, and you're willing to buy at $150k, the market value of that asset, on that exact day, is $150k regardless of what an appraiser says.

A term you may be thinking of is ARV. For owner occupied loans, google search "FHA 203k." For investment SFRs, google search "HomeStyle." Those use ARV.

Wrong. When lenders use LTV, the V, or Value, is the purchase price. They are not concerned if the property appraises for more than the purchase price. They are concerned if the property appraises for less.

Lenders want you, the buyer, to have skin in the game. Not a single lender will allow you to purchase this house with $0 out of pocket. Things have changed since 2007. 

Your best bet is to find a seller willing to finance 100%. Your odds of that are slim to none as well. Any seller willing to carry 100% probably means that there is a huge issue with the property.

I suggest you wholesale some more properties, build up a 3.5% down payment, and use FHA financing to buy your first property.

@Trevon Peracca   Well... I hate to be negative but... appraisals are not very accurate.  Most banks know this.  If they plan on holding the loan long term or if they follow good business practices they will consider sales price as a better indication of value than an appraisal.