OfflineI've been reading throgh some of CBRPOWER's post. I one of them he talked about a strategy he was using to find cash flow houses. He was purchasing in areas that were nice, but were not overpriced, but had good rental income. So, I thought... where is this happening right now. Well, it's actually happening right here my own neighborhood. My area is saturated with REO's. So much that you can find some houses under 100k if they've been on the market long enough. I don't have money, so I was going to try wholesaling some of these deals, but the banks are being very strict. So, I thought what if I use HML and purchase the house for my own portfolio? I was figuring that I could create a cashflow between $200-$500 per month. My only concern is when I go to traditional financing. Am I going to have a hard time getting a traditional loan for that house because of my poor financial situation? Or will the lender look at the fact that the house has been creating a positive cashflow of x amount of $ each month and I have a signed lease or rental aggreement with a tenant for the next year? Any suggestions or pitfalls?
KimmyJ
what a HML is going to cost you for a buy and hold loan for your own..Yikes..It was outrageous when I researched it and I have a very high credit score. Not to be a downer but I would find out exactly how much before I did anything.
(If you have done that and still can realize that much cash flow..awesome!! Go for it and tell me about your HML).
Best wishes!
"Whether you think you can or can't, you are probably right" Henry Ford
I understand what you are thinking. Buy a home using HML then refinance and get 100% loan using FMV after seasoning. Check first with a lender to see if you would qualify for the refy using the rental income as an asset for the loan. If you can, and the numbers work out, go for it!
Al
"NOW GO FIND A DEAL"
Watch your thoughts; They become words,
Watch your words; They become actions,
Watch your actions; They become habits,
Watch your habits; They become character,
Watch your character, it becomes your destiny.
Frank Outlaw
Like lovebargains said, check the prices out first before doing anything. You can always go into a bank and talk with the mortgage lender to see where you stand with your credit and tenant agreements. They can give you a ton of info. I suggest you do that. See all options and hopefully one will work. Good luck and keep us posted!
Kai
Money won't fall into your hands, you have to earn it!