Posted by Nate-WI on April 21, 2006 at 18:05:27:
Wow I’m suprised that more don’t know about this. Then again I wouldn’t know about either. I have a very good realtor, who is an investor, and a very good mortgage broker who gets deals done. The lenders I’m using are local and I really thinks this helps. They are in my area, know the properties, and understand the values in my area.
Wes is correct in that duplexe’s or SFR’s are easier to get and you usually get better rates. However with this nothing down deal I’m looking at 8% interest rate on a 2-3 yr note. This is fine with me as I will re-fi in a year or perhaps even earlier to pull money out. Then I can start putting down 10 or 20%. But then again…why when I can still cashflow with none of my money into them I didn’t know about this technique but since I know of it I’m hunting for rentals now that are good, good buys and I can cashflow with. It’s my opinion that rentals in my area are starting to come back and now just might be a good time to start buying. Higher interest rates just might push people into rentals again. My two cents of course.
My FICO should be fine. There is no reason why it should go down. Other than a few inquiries my report should be fine as long as I keep making payments. As far as maxing out loans that’s a good question. I would speculate that as long as my rentals are cashflowing very well and are covering all my expenses then who knows? If I can do say 10 rentals using this technique and they are cashflowing say 500 bucks a piece then I should be sitting ok. Plus if I run into a snag with the loans and lenders then I’m gonna have to change my strategy and look for owners who want to owner finance the entire transaction which is not impossible. Plus I know many note investors who buy carried back notes so I could help the noteholder sell their paper. Anyways I’m babbling.