Do you have a burning desire to make money in real estate? Do you want to start buying properties today regardless of your credit and with little money down?
Flipping houses for profit is more popular then ever since more people can afford fixer-uppers. Flipping homes has made remodeling-to-sell more competitive its known to be called “a number game”.
Buying properties with no money down
Several classic methods are commonly used to purchase real estate with any money down. There are infinite variety of situations in a real estate transaction that could lead to a deal with a no down payment. With the economy doing so poorly right now, bank foreclosures are available for little or no money down.
The most common ways to obtain a no down payment loan:
Seller second: The buyer obtains a new first mortgage. This strategy is required for the lenders approval since the lender who is making the 90% loan, will have to agree to allow the seller to take back a second mortgage, then seller finances the rest. For example if the buyer has good credit the buyer will have a better chance of getting it approved and if the buyer has a lower credit score, they may or may not approve it.
Utilize one of the many low or no down payment programs that exist: Many are intended for owner occupants but some are available for investors. There are some points to remember when purchasing investment property with no money down, talking to the right lender. A key point is the comparison of monthly payments to expected rental income. If you are financing 100% of the purchase price, your payments will be higher. If you have a second mortgage payment to add to a first mortgage, your payment may be even higher. Being sure your rental income will cover the entire monthly payment is important.
Buying wholesales properties, using hard money to purchase and rehab: When the rehab is done on the home you’ll get a new mortgage that pays off the hard money loan. You may have to pay some of the money when it comes to closing the hard money loan, but you’ll get it all back when you refinance, so you end up with no money out of your pocket. This becomes not just a no down payment deal, but also a cash back at closing deal.
Purchasing a home with bad credit
Bad credit loans are designed for those individuals whose credit report is less than perfect. These bad credit loans will allow you to buy a home with bad credit. Typically this would be anyone who has any one of the following credit issues:
credit scores of less then 620
bankruptcy in the last three years
foreclosure in the last four years
collection accounts, judgments, or liens
30, 60, or 90 day late within the last two years.
A bad credit loan is technically referred to as a sub prime mortgage. These types of mortgages are a higher risk to the mortgage lender because of the past credit history of the borrower. The basic concept of these types of mortgages is to provide a borrower a second chance to prove their credit worthiness and eventually refinance the mortgage after establishing a perfect credit history for at least two years. Just remember even though you have bad credit your still able to purchase a home, but your going to pay more than a borrower who has sparkling credit.
Buying and selling real estate is one of the most profitable ways to make money. Real estate is a very fast-growing business field, and many are learning how to turn the market to their favor. Even if you only get a little bit of money for estate investing in the beginning, it doesn’t mean you can’t go through with your American Dream.