OfflineHelp - I need financing options.
I have REO property options, and investor options for a down payment.
I have set up an LLC and have an EIN number as well.
My personal credit score is fair to poor.
Anyone have ideas on financing options. I am running into issues with most lenders I have contacted. Because of either my credit score (+/- 640) or the fact that the properties I'm looking at will be investment only (I won't be living there), or both.
If anyone has any ideas for me, they would be GREATLY appreciated.
Thanks
steve
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Have you tried a Hard Money Loan. It might be the way to go until you can refi or sell it.
Hopefully this helps you.
Hopefully this helps you.
My concern is the high interest rates.
Lets say I have a single family residence that I can pick up for $135K with an ARV of 175K.
I have investors in place for the down payment ---- 35K
So, I take a hard money loan for the remainder ---- 100K at 12% interest for 3 years
I pay the interest only payments to the hard money lender (1000/month) with a renter.
I I refi or sell the property 1 year later - am I on the hook for the ful 3 year term of interest to the hard money lender? or do I only pay interest until the principal is re-paid?
If I only pay interest until the principal is paid, and sold the property for 160K I would have 22K profit (after repaying 100K principal to the HM lender, 35K principal to my investors, and 3K interest to investors)
Is this making any sense??????
I ran into the same problem with the LLC setup and loan because I had no business credit. So another $3500 later becuz of not knowing the steps to go thru, I went thru a company to accelerate my biz credit. Applying for some loans on my own for unsecured credit dropped my personal credit score down to 670. Here I was, for 5 months, trying to get a loan thru the LLC when I haven't established biz credit. I finally got a personal loan thru Quicken Loans. Rates were 5.375% and 6.5 pts + closing costs, 25% down. Usually a hard money lender won't go a yr term. I've seen 6-12 month terms with interest and points and always ask if theres a prepayment penalty. Have you made an offer of $135, seems high. Be ridiculously bold and offer $90000.
Good luck,Bruce