First Home - Posted by lawrence

Posted by Paul Carlin on June 22, 1999 at 15:04:39:

Yes there is a way for you. You can get FHA home loan. You only need to come up with 3%-4% of the sales price. There is one thing you need to know. FHA puts limits to the amount they will loan for a house. It varies from county to county. Just call some one eles, this first guy is lost, and ask what is the FHA home limit in your county, or the one you plan to buy in.

First Home - Posted by lawrence

Posted by lawrence on June 22, 1999 at 14:59:49:

I’ve been logging into the site for several months now but have never participated. I wanted to bother some of you with some help if possible? I’m wondering if anyone has some creative suggestions about buying a first home with some negative credit history and little money down? I’ve read most all your articles,however, it seems most have to deal with the investment opportunities within the real estate business. I however, am looking to buy a first home. I talked to a mortgate broker and he indicated I would need 15% down before I could get into anything, I know most of your articles discuss ways to get into real estate with no money down. Does anyone have any ideas or places where I can begin investigating opportunities to purchase a residence with some negative credit history and a small down payment. I’ve considered a rehab, however, it seems I’m still looking at 15% down?
Your help is greatly appreciated.

Re: First Home - Posted by Bill Gatten

Posted by Bill Gatten on June 23, 1999 at 13:28:14:


I’ve bought my last five residences and many, many investment properties without a single penney out of pocket and without a second’s worth of bank qualifying (albeit… in the ones I lived in, there were some minor closing costs that I didn’t get back immediately).

Here’s one way to do it (not the “be all and end all”… just a way):

Find a seller willing to stay on his/her existig loan for a couple years while you agree to live in the property and make all of the payments, and handle all of the repairs, maintenance, upkeep, property taxes and insurance for a few years (2, 3, 4, 5). Explain that your intentions are to refinance in your own name and pay off his loan as soon as you have the down payment and the credit to do so. You agree that at that time, you’ll repay any/all equity he may have in the property at start (plus interest, if he asks for it… many don’t).

Explain that during the period you are in the property and waiting to refi, he/she needn’t even transfer the title to you or take any chances with you. Suggest, instead, that he/she put the property in their own Land Trust–in their own name–and simply make you a co-beneficiary in it. This process [a PACTrust™] gives you 100% of all the benefits of homeownership, including full tax write-off. And… no one has to take any chances with anyone (re. either party’s personal or legal problems, tax lines, judgement creditors, BKS, marital disputes, etc.).

Also, Lawrence, with this process you don’t even have to care a twit about whether this seller has any equity to start with or not. As a mastter of fact, the property could even be a little (sometime quite a bit even) over-encumbered and not matter to you. The key is just to make sure that your aggregate payment is not significantly higher than it would be if you had gotten a 100% loan on the same property. To justify a slightly higher payment, you might even add a penatly for yourself (due to having no credit and no money) and be comfortable in paying slightly more than you might on a 100% financing, medium interest-rate, loan on the same house.

When you find the guy/lady ('trying to be politically correct here)…give me a call, and I’ll sell him[her] for you (no charge what-so-ever, you just pay for the conference call…I’ll even write up the land trust for you at no charge if you wish).

'Know what’s holding you back? Nothing more than a lack of knowledge that you don’t need to be held back.