Buying RE “traditionally” - newbie - Posted by Jim (NY)
Posted by Jim (NY) on August 13, 2003 at 15:44:31:
I know that the premise behind this site is buying RE “creatively”, however, as a newbie with access to some cash I was wondering if buying income properties “traditionally” (going through a lender) is a bad deal. This particular realtor said that she did own property herself, and she works with a lot of investors.
The reason that I am asking is that I took the plundge and made my first call to a “for sale” add in the Sunday paper. The property advertised was through a realtor who basically told me that not to many people in my area are willing to hold paper (don’t worry, I don’t believe her for a second). She suggested that I go the “traditional” route (pre-qualify for a mtg), and that she had a couple of properties in my price range that qualify for sec. 8. She wanted me to pre-qual for a mortgage and have the lender fax her the letter of qual.
I worked the numbers, and figured that with 5% down I could still get ~ 15-20% ROI on the property buying this way. Seems like a good deal to me, but there seems to be this “stigma” around buying NO MONEY DOWN. I called a lendor and pre-qual. for a loan. In reality, if I really want to buy this NMD, I can use credit for the down pymt. and still get a decent ROI. Am I making sense, or is there something that I’m missing? Thanks in advance, Jim (NY)