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Good afternoon Forum!!
I was wondering if anyone had any input...
My Brother and I are planning to launch our Residential Real Estate Investment company. We will be prepared to purchase our 1st property early next year. (in about 7 months or so)
We've been doing some homework though. We know we want to make our business an LLC to protect our assets.
We we don't really know is how we can get financing. We are planning to start small... purchase a fixer-upper for maybe $20k-$25k. We understand it might be a little bit before we can get a tenant, since we plan to do renovations. We are just unsure about the Financing piece. What banks will finance a new Investment Property business with no track record or income history... even if it's only for $25k?
Does anyone have input??
You and your brother are most likely going to have to qualify for at least the initial purchase on the strength of your own assets and income. In most cases the "Fix up" properties are not going to be eligible for mortgages and are purchased with cash. Once you have one rehabbed and flip it or rent it then you can take the proceeds and move onto saving for the next. If it was easy - everyone would do it.
Got it.
That's basically what we've gathered since yesterday. One bank suggested I take out a Home Equity Loan or Line of Credit and use that to buy the house in cash. I just purchased my home last month. Not much equity available yet. If I decide to entertain that option, I'll have to look into it in 7 months when we'll be ready to buy our first property.
Thanks so much for the input!!!
i dont think that bank ll finance you. Because you dont have any business idea or dont have any business track record.
http://triangle-real-estate-investors.com/
Yes. I agree.
I read somewhere that we'd be looking for a Bank Loan. Not a Mortgage Loan.
We'll probably look for properties in the $50K range. We'll have about $20k-$30K to put down, so we'll need to finance the difference.
Thanks for your input!!
If you're going to do a flip, look for a hard money lender for at least the first 1 or 2 properties. It will cut into your profits but will likely turn out better than trying to do a heloc or something on your principal residence. Once you have a couple under your belts you should be able to get some financing. Best case would be to be able to hold a couple of properties as rentals and then establish a line of credit based on that equity. There are usually some local banks that like this type of financing as they get a nice rate.
Search for "hard money lenders."
Do a lot of research....... these loans are a very different world, and I would hate for your first deal to be a bust due to shady lending. Remember they should not be asking you for money!! If they start to ask you for money early in the process BIG RED FLAG.
Good Luck. I PM'ed you a good investment site,.
you aren't an investor unless you are risking your own capital.
you arent looking for a mortgage... some kind of bank loan will be required. maybe you can leverage home equity or paid off autos
Thanks so much for the advice and input!!
I thought about using equity. I just closed on my home in June of this year. There wasn't much equity then, as I paid what it appraised for.
I'm hoping that by the time I'm ready to buy my first property (March - April 2014) I'll have a little something to work with.