Deals, hard money, regular mortgages, unfinished projects, and the like.

Here is what I have learned this week concerning forcloures and financing.

Mortgage Financing:

Most of the home loan money out there is full doc, primary residence use. Low down payment loan are still available with strong credit scores. All loans will require tax return and check stub verifiable income. Stated income loans are far and very few between. Investor money is very hard to get and large down payments will be needed. 30% plus if they are available at all and income must be verifiable by tax return. Refinance for investor properties is pretty much over, especially if they have three or more properties.

Look to owner financed deals if you can, or it may be hard to get the deals done. Cash is king.

Hard Money: Yes its still out there. Hard money is non-traditional loan sources. Mostly private money. Terms are 7.25% and up interest rates plus up to 7 points, steep pricing but it is there. Hard money loans are often based on your income and the properties value. Your down payment is less important then the loan to value ratio, you will need 30% plus loan to value to get the deal done. These types of loans are available through loan brokers.

Home Prices: I am working on a $465,000 foreclosure purchase. The houses has a $937,000 taxable value according to the tax office. Getting the loan is the hard part as I am not planning to move in. My point is, the deals are out there if you have the cahonies.

I found another foreclosure that is a small three bedroom, one bath, for $38,000. An investor could buy this one, put $10K in repairs. and sell it for $69,000. If you paid cash, then sold it on a owner carry note, you could borrow against the mortgage note at your bank to do another one. You should be able to borrow 70% of the note amount, that gets you all of your out of pocket money back, plus the down payment you got from your buyer. You might even get a higher price then I suggest because you are financing your rehabs, I would charge 8% interest on 30 year loans with 5% down. If you finance the sale yourself you need not worry about selling cost or appraisals. The property is worth whatever the buyer and you agree on. True, your profit comes from the spread between your bank payment and what the buyer is paying you, but it is good money and you might get a gain from the interest rate spread on the loans, if you plan it correctly.

Want to buy a construction project?
Unfinished construction projects information is available at https://www.unfinishedconstruction.com/Home.html

Food for thought: share your ideas with all of us on your own blog on this web site, we need your brains.

Update: 11-21 I did not get the laon I wanted to buy the old house, shame, I could have made real good money on it. I did not like the terms I was offered and did not want to make a large down payment. I found money available at 20% and 30% down but cash is king and being cashless with a $4500 note plus repairs was strectching it. Next deal please!