Help! Question re: Creative Financing in California
I met with a mortgage broker last night who blurred my vision of buying ten rental properties this year by contradicting almost everything I've learned from Dean about finding financing:
- he said "no institution or private lender in California will allow anyone to get a loan without putting 5%-25% down, and they will not allow that 5-25% to be creative financing, such as "owner will carry" -- nope, we have to pay it up front."
- he said "no institution or private lender in California will allow you buy a property to flip it, you must live in it for one year first."
- he said "no institution or private lender in California will give you a loan for the appraisal value anymore, so if you can contract a $200,000 house for $100,000, it doesn't matter that you just made $100,000 in instant equity, they still will only give you a loan based on the sales price, not the appraisal price."
- he said "once you own four properties, it becomes difficult-to-impossible to get more loans for more properties because institutions and private lenders begin viewing you as a risk, despite how much cash flow or equity you have. There used to be "portfolio lenders" but they have gone away."
- he said the one-and-only way to get creative finacing in California is with owner financing only.
Help! Is this all true? I simply do not believe it because it goes against everything I've learned from Dean. If there are any investors here in California defying the rules of convential lending, I would greatly appreciate any advice you have for finding better lenders and brokers.
Thank you,
Valerian
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Valerian
I am new to this, and appreciate any advice and assistance! My goal is to own a home of my own, a few rental properties for monthly income, and to fix-up and re-sell as many properties as possible. If I can "green" these properties, that's even better! Thank you.
I met with a mortgage broker last night who blurred my vision of buying ten rental properties this year by contradicting almost everything I've learned from Dean about finding financing:
- he said "no institution or private lender in California will allow anyone to get a loan without putting 5%-25% down, and they will not allow that 5-25% to be creative financing, such as "owner will carry" -- nope, we have to pay it up front."
- he said "no institution or private lender in California will allow you buy a property to flip it, you must live in it for one year first."
- he said "no institution or private lender in California will give you a loan for the appraisal value anymore, so if you can contract a $200,000 house for $100,000, it doesn't matter that you just made $100,000 in instant equity, they still will only give you a loan based on the sales price, not the appraisal price."
- he said "once you own four properties, it becomes difficult-to-impossible to get more loans for more properties because institutions and private lenders begin viewing you as a risk, despite how much cash flow or equity you have. There used to be "portfolio lenders" but they have gone away."
- he said the one-and-only way to get creative finacing in California is with owner financing only.
Help! Is this all true? I simply do not believe it because it goes against everything I've learned from Dean. If there are any investors here in California defying the rules of convential lending, I would greatly appreciate any advice you have for finding better lenders and brokers.
Thank you,
Valerian
Valerian
I am new to this, and appreciate any advice and assistance! My goal is to own a home of my own, a few rental properties for monthly income, and to fix-up and re-sell as many properties as possible. If I can "green" these properties, that's even better! Thank you.