Posted by George in Raleigh on November 27, 2000 at 11:13:57:
Ed-
Any suggestions on # 7, sub-prime financing? Who does it, and what kind of rates can one expect to have to pay?
Geroge
9 Ways to do a deal if you have bad credit… - Posted by Ed Garcia
Posted by Ed Garcia on November 05, 2000 at 13:11:42:
I just finished answering a post that I thought might be interesting for newbies who are just starting out and have poor credit.
Jim,
In my workshop, I teach that there are at least 9 different ways you can do a deal with poor or bad credit.
Now before I give them to you, I want you to know that I’m really supportive of learning deal structuring. The first thing you need to do is, “investigate your deal” to know what I call( where the bodies lie) another words what is the sellers main objectives or motivation. That allows you to have an idea of what approaches are going to be compatible with the sellers needs, allowing you to do the deal.
Here are the 9 ways that I’ve mentioned.
(1) PARTNERHIP: Find a 50/50 partner. It don’t have to be 50/50, it can be what ever you can negotiate.
(2) FLIP: the best way to flip is to find a potential buyer first and then find a property. You can do this by running an ad on a property to see what kind of action you get. Once you have a potential qualified buyer, you’d be surprised how easy it is to find them a house.
(3) LEASE OPTION: Many times you can buy and sell with a lease option. We call this a “Sandwich Lease Option”. Jim, I’m not going to go into any great detail, you can find this information all over this forum.
(4) SELLER CARRY BACK: This is one of if not my favorite way to buy. Now the best way to utilize this system, is to do a second seller carry back in order to give the seller some cash in the deal. If money doesn’t exchange hands, many times the seller doesn’t feel that they consummated a sale.
(5) HARD MONEY: Hard money, is an equity loan made at approximately 65% LTV, based on the equity of the property only. Credit is not a consideration.
(6) HARD MONEY/SELLER CARRY BACK: Again, You can have the seller carry back a second and refinance the first, giving the seller some money. You can do variations of this system.
(7) SUB PRIME FINANCING: Many National lenders will provide financing at 70% with poor credit and won’t verify money down.
(8) SUB PRIME/ SELLER CARRY BACK: Again this combination can provide money to the seller, rather than ask them to carry the whole thing. Also there are local independent portfolio lenders that will lend as well as mortgage co’s and I always recommend seeking them out. National one’s would be Associates Finance, American General, Beneficial etc.
(9) CREAT YOUR OWN MORTGAGE: In our work shop, Terry Vaughan covers this, and shows you how to discount it and market it.
Jim, I hope this post is helpful to you and will encourage you to stay with it. The only way you won’t be successful in this business, is when you stop trying.
Ed Garcia
trying to buy w/500 scores - Posted by Melissa McLaughlin
Posted by Melissa McLaughlin on January 06, 2001 at 16:51:48:
Help, I am trying to buy a 2001 triple wide mobile home and waterfront property. The total cost being 140,000. My credit score is 590 my husbands 532. Four years ago my husband lost his job and we had alot of charge offs. We almost have all creditors that have settled with us.
We do have about 7 new lines of credit that are between 6 and 12 months old in very good standing. My question is this Do you think I can expect to do conventional financing at 5% down and have an interest rate of no higher than 9% without points? I would like to know if I am dreaming or this can happen. Also, our income has gone from 27,000 to 95,000 in 4 years. I beleive our debt ratio is about 34% for the good. Please help me. I 've never lived in a mobile home before but this property is my slice of heaven, I could die there. I hope to build before I do.
Thanks, Melissa