100% financing for investment property today is tough

Welcome to the DG family, as we like to call it, we're happy to have you here. Have you tried a hard money or private lender? Just a couple of suggestions to think about.
We look forward to hearing from you and sharing your rei journey with you!
God bless,

When you say hard money or private lender can you give me example.....thanks, I'll get it fast

trying to sign up for this site, not allowing me to,must be doing something wrong.......I need Plenty of Help.....LOL

hard money lender: is a short term money lender that will finance a REI transaction, including rehab costs for a HIGHER interest rate than a conventional financing source, they tend to lend anywhere between 60%-75% of ARV(after repair value), and usually want thier money back within 12-18 months, i ONLY recommend using HARD MONEY for quick FLIPS(no long term investments), unless you plan to REFI.

private money: is a also known as private investors, they also fund REI transactions with the intensions of getting a HIGHER return on thier money, then if they put money into a CD or interest bearing account, they also typically want the loan secured with the collateral being the property your trying to purchase, BOTH are good ways when used correctly

Hard money lenders
A hard money loan is a specific type of asset-based loan financing in which a borrower receives funds secured by the value of a parcel of real estate. Hard money loans are typically issued at much higher interest rates than conventional commercial or residential property loans and are almost never issued by a commercial bank or other deposit institution. Hard money is similar to a bridge loan which usually has similar criteria for lending as well as cost to the borrowers. The primary difference is that a bridge loan often refers to a commercial property or investment property that may be in transition and does not yet qualify for traditional financing, whereas hard money often refers to not only an asset-based loan with a high interest rate, but possibly a distressed financial situation, such as arrears on the existing mortgage, or where bankruptcy and foreclosure proceedings are occurring.

Many hard money mortgages are made by private investors, generally in their local areas. Usually the credit score of the borrower is not important, as the loan is secured by the value of the collateral property. Typically, the maximum loan to value ratio is 65-70%. That is, if the property is worth $100,000, the lender would advance $65,000-70,000 against it. This low LTV provides added security for the lender, in case the borrower does not pay and they have to foreclose on the property.

Below is an example of how a commercial real estate purchase might be structured by a hard money lender:

65% Hard money (Conforming loan)
20% Borrower equity (cash or additional collateralized real estate)
15% Seller carryback loan or other subordinated (mezzanine) loan

----------------------------------------------------
Private money lender
Lenders range from private individuals, trusts, and LLCs to pension funds. Individual lenders generally have substantial knowledge and experience in real estate or trust deed investing.

The motivation for investing includes: the simplicity of the underlying investment and a desire for: 1) An investment secured by real estate 2) Regular income derived from monthly dividend distributions; 3) Higher yields than those available from investing in money market funds or bonds; 4) An Active involvement in real estate finance.

The lending process
A borrower seeking funds approaches a mortgage broker or private money lender and describes his borrowing needs. These include: 1) The amount of money sought; 2) The value of the property that is being pledged as security, or collateral; 3) A description of the property; 4) The use of funds.

It is very difficult to secure any loan in today's market, especially one with complete financing. You may have to bite the bullet and hustle for those harder loans until the market settles. I think Bush is going to help bail some people out, which may make banks more investor friendly.

Just have faith.

Hi Bob! Welcome to the DG family

Another option mentioned in Dean's book would be to approach the seller and discover their "why".

That is, why are they selling? If it is to relocate and they just need some steady monthly income, then THEY may become that private lender which could translate into no money down...

A lot of investors ALWAYS say that most HARD MONEY LENDERS don't lend based on credit scores(fico) and thats just NOT true, i would say based on my findings that 50%-60% have some type of fico score requirment, most were somewhere around 630-660, so while they are a GREAT alternative to CONVENTIONAL FINANCING, they aren't some "miracle lender", however, there are HML's that DO NOT have credit scoring as part of thier lending requirments

Sully
It is great to know that some financing corporation will supply the funds to complete renovations. When we think about purchasing, there is alway the possibility that the buyer will have some fixing to do. Therefore this info is important and key.

New comer, SanBern

lenders are canceling home-equity line of credit right and left! If this happens to you, contact your lender and ask whether it will reconsider the cancellation if you produce a report from a lender-approved real estate appraiser showing that you still have substantial equity in your home. If you cannot convince your lender to reinstate your HELOC, ask if you can open a new HELOC with a lower limit.

That's good to know. Man, I'm so glad that we have all these great coaches giving us top notch information! You're all Dean-o-myte!!

http://www.deangraziosi.com/node/8724

THANK YOU SOOOO MUCH

Thank you for reading,
If I make 75,000 per year and I have a fico of 740 as well as have a mortgage out for 150,000, how much could I borrow from the bank in order to buy three or four properties but as soon as I get them fix them then flip them in 6 months to a year??? How flexable is the bank or the mortgage brokers if I have a plan, lets say either have people lined up to rent out one or have someone lined up in 6 months who will buy the fixed...I guess I'm saying what is the best strategy to use to take on 3 to 4 mortgages at a time with the intent of getting off my hands either renting or flipping without putting any money down and without paying any money for the 6 months?

a great relationship with your bank(say 10 years of banking with them), they know you by name, and if you've had any personal loans with them, or used them to finance your car, that would have a HUGE impact on how far they will go with your "PLAN", but everything else looks to be "butter" your fico is "PLATINUM" and you make good money too, as lond as your "DEBT TO INCOME" isn't astoundingly HIGH, i would have to say your chances look in your favor. good luck

The market cycle at this point is a buyers market. Alot of properties sitting, rather they are in foreclosure, or sellers just motivated to sell. In this type of market, I would suggest trying seller financing, or Contract for Deed (which is strict owner financing). On either strategy, you won't need to quality for financing and it won't effect your debt to income. You can then put renters in them or do lease options.

I appreciate the responses guys, I have some options now so I will go to the next step cause I drove around tonight and saw with my own two eyes about 7 of the pre-forclosures off the foreclosure alert system DG set up. One thing that struck me as kind of odd, was that with the the exception of two the other five didn't look so shaby but in fact in good condition...is that common? Also, one of the two that looked like anyone could tell was vacant was boarded up and has, in the quick view on the foreclosure alert, information saying the default amount is for 35,000 but the estimated value is for over 759,022.00 SO does this mean I can get the home for 35,000? Also, lets say that the default amount was 500,000 instead of 35,000, I would imagine the bank would not play with me, trying to get me to pay more then default amount but since, the poor guy who owns the house either died or something when the mortgage was almost up, paid majority of it, would you say the bank is going to try to charge me way more the 35,000 and make the money two times?

A foreclosure doesn't automatically mean it's neglected or distressed, although the payments weren't made they still may have been kept in good condition. There's really no common situation with foreclosures, they're all unique situations but similar circumstances. No the default of $35k is the amount they owe on top of the balance owed. I doubt you can get it for that, but that would be suweeet if you could! I don't understand what you mean by the bank charging you twice so I'm goin to end here.
Hope I helped clarify some of this anyway... LOL!

So the default amount doesn't give you the whole story...that goes on top of the principal that they defaulted on meaning they are 35,000 worth of paymets past due on the principal? Sorry for not knowing,
Thanks
Brad

the "DEFUALT AMOUNT" like E said, is just the amount of payments that are in default, thats still owed plus the mortgage balance

Here is a list of creative financing that can be used independently or combined to do 100% financing:

Seller Financing
Hard Money Lenders
Private Lenders
Assignments of Contract
Subject to Purchase
Wrap Around Mortgages
Lease Options
Partnerships
- Credit partners
- Finance Partners
Using a 401k, IRA, Mutual Fund, Stocks, Credit Cards that are yours or other persons.
Double Closings
No Seasoned Refinances
Purchasing Using a Tenants in Common (great for multi family)

1)What is a seasoned refinance?
2)Tenants in common?

Thank you
Brad

A "No Seasoned Refinance" is a refinance before the first payment is made. For example you purchase a home today then refinance tomorrow. This is great when working with hard money lenders because you do not want to pay their interest rates if you are renting the property.

A "Tenants in Common" is similar to a Real Estate Trust. The Tenants in Common qualifies for the loan and purchases the property. It is a way to put a lot of people together with the common goal of purchasing a selected property.

Can you give me a detailed example of a refinance?

Thank you
Brad