I'm In Need Of Financing...HELP - Posted by Liz

Posted by Wayne on August 21, 2003 at 15:36:31:

I’m intrigued by #2 on this list. Can you elaborate on this method?

I’m In Need Of Financing…HELP - Posted by Liz

Posted by Liz on August 19, 2003 at 08:04:00:

I have found 3 properties, and I would like to make low-balled offers, but the Real Estate agent needs 1% down of what the offers are. The total I would need is $5200.00, I have about 1/2 of that, but don’t want to tie up my money just yet. I know I can come up with the rest if this is the only way, but I’m not sure this is the only way.
Two apartment buildings already have positive cash flow, and the 3rd is a vacant 10 unit in need of 50K in work to bring in a positive cash flow of about 4k per month after expenses, upon completion and when fully rented.
I know there must be a way of obtaining financing where I just have to show the positive cash flow to the banks and since these offers are low-balled, the properties will appraise for more than the loan amounts that I need. With that in mind, isn’t there any loan programs that will help?? Unfortunately my credit scores average only 541, so there’s another obstacle. I have signed up for Rich Dad’s seminar on Sept 18th, and many more RE investing seminars, but unfortunately I need this info as soon as possible.
If anyone can point me in the right direction, I would greatly appreciate it. Thank you so much! My e-mail address is in my profile if you need any more info.


Re: I’m In Need Of Financing…HELP - Posted by Ed Garcia

Posted by Ed Garcia on August 19, 2003 at 09:29:50:


Personally I feel attending the Rich Dad Poor Dad seminar for you would be a waste of time. You need to clean up your credit, learn how to structure deals, and what financial options are available for you to do deals now.

The Rich Dad Poor Dad seminar would be good if your desire is to learn multiple streams of income. Even at that they plant seed but don?t give you the nuts and bolts of Real-estate Investing.

My suggestion is for you to go to creditinfocenter.com and learn how to clean up your credit. This is free. Read every article you can read in the ?How-To Articles?. Continue to read the ?Main News Group? and every article you can on this site that may be titled to your desired learning.

Meanwhile here are the (9) ways to do deals with no money and no credit.

9 ways to do a deal with bad credit


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 seller’s 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.


I find a house that has a small balance on the first. Lets say the house is worth a $100,000; the balance on the first mortgage is $30,000.

If I wanted to buy this house for lets say $80,000, I could ask the seller to carry back $15,000 and go to a hard money lender to borrow 65%
of AMV (appraised market value) of which is $65,000 and the seller carrying $15,000 in second position, would ad up to $80,000. It would also give your seller $35,000 new cash, and $125.00 income on the $15,000 loan that they carried at 10% interest only, for 5 years.

(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 workshop, Terry Vaughan covers this, and shows you how to discount it and market it.

Ed Garcia