Ed - Need help w/Financing Assistance - Posted by Todd

Posted by Earl Stacey on March 15, 2001 at 20:45:30:

I can probably help you. E-mail me so we can discuss your situation.

Ed - Need help w/Financing Assistance - Posted by Todd

Posted by Todd on March 07, 2001 at 14:46:43:

Ed, I live in Knoxville, TN. I have been educating myself on investing and am looking for properties to either: rent, flip, or rehab.

My problem is that I do not have much money to put down. I would like to not have to put any down! I have not made a formal application with any lending institution, but through inquiries have been told that I need at least 10% down, and that I must have 6 months “reserve” (I still am not sure what they mean by the 6 month reserve - I am guessing 6 months of monthly payments?). Since I don’t have much money to put down, I obviously do not have money for closing costs. Additionally,I believe that I want to borrow funds above the purchase price to use for repairs.

I have good credit (I just don’t know what the “score” is. I have seen others post 736, 647, etc. I could not find this information on the credit report I requested). All I know is that all of my credit states a “1” by the rating (meaning that I “pay as agreed”).

I have a few properties that I have called about. They are as follows:

1)A small 2BR 1BA house in a “decent” neighborhood (the house is very small - I do not know the square footage, but I am guessing it to be around 500 - 600+). They are asking $42,900. The house is currently rented for $420/month through KCDC (which is a local distributor of HUD money for low income families) which means that the rent is guaranteed and the current tenant wants to stay. The roof looks like it needs to be replaced and I have NOT seen the inside yet but am counting on it needing some repairs, plus the outside could stand to be landscaped and “tidyied up”. The realtor said that the owners were “having a hard time” and needed to sell the property (it just listed in this past Sunday’s paper). I did some checking and found out that the owners are 2.5 YEARS BEHIND in the City taxes and 2 YEARS BEHIND in the County taxes. Total back taxes are $966.56. The current owners bought the house in May, 1986 for $8,000 and the tax records show the house appraised at $24,600. I was thinking of offering like $25K to $27K. (I am afraid to offer without knowing that I can get the funds).

  1. A house that is split up into 2 apartments (semi-duplex): one has 3 BR 1BA the other 2BR 1BA. The current tenants are suppose to be in the process of being evicted (for not paying rent) and the house definitely needs to work: new roof, cleaning, painting, and probably a lot more - I have not seen the inside). The house is in an okay area, but would probably be best suited to be approved through local KCDC (which requires that the house be in good shape before being approved to be on their rental program) but this way I am guaranteed monthly rent. Asking price is $55,000 and the total square feet is approximately 2400. I was thinking about offering $35K - $40K: If approved for KCDC I could get $420 for the 2BR and approximately $520 for the 3BR - but it would require quite a bit of work (and time) before I could get a tenant in there (and time is a little scarce with me since I work full-time).

  2. The same owner of #2 above also owns a single family home in a nearby neighborhood that has either 2 or 3 BR and it listed in the low $40K’s. It needs a new roof and paint (outside and probably in - I have not need the inside). Could also rent through KCDC (after repairs are made) and get $420 - $520/month rent. Could possibly offer $27K - $30K.

I would like your opinions on these properites and would like to know if you can loan in the state of Tennessee and what your terms are. thanks for your assistance. You can e-mail me at treynolds@rrcinc.com and I would be happy to provide you with income information, current debt, etc.