I’m not trying to throw salt in your deal, but your friend is not that knowledgable on the current state of affairs. Many counties, states and municipaloties etc. have lots of programs for people with not enough down. if she has good credit, she should be able to get a loan/mortgage for 100% financing. She’s not speaking to the right mortgage companies or banks. When I started, i had great credit and no money down and places were throwing their loan packages at me.
Especially if she’s clearing $2900 each month with almost no debt.
My first call on my first l/o (my own house) is from some-
one I know. She has good credit but zero down. She has
almost no debt and clears $2900./mo. I was looking for
$1209/mo. which would give me $200. cash flow. House is
appraised at $138,000. I’m willing to help her own but
the zero down caught me off guard. She’s going to class
to get her R.E. license so she may have some extra money
when she starts selling some houses. The house will need
a new roof to qualify for FHA. I had the price at $142,000
in the ad that she answered. She feels she can handle the
$1209. Thanks for your help.
Posted by Jim (MD) on October 16, 2003 at 21:57:43:
The first rule to follow when renting a property is do not rent it to a friend. One is inclined to bend the rules to accomodate the friend, and you have already shown those tendencies.
I would never lease option a property with zero down. My attorney frowned upon a lease-option contract he recently wrote up with only $500 down. Check the terms of your lease-option contract as it may not be valid without a down payment.
Posted by Alfredo E. on October 16, 2003 at 17:16:32:
Steve:
Why are you going to L/o your own house, as your first experience?. THis way you have to pay rent, and don´t get any cash for your CRE to come. I would rather sell or refinance the house, instead of L/o it.
If you want to L/o anyway, I would ask for a higher rent, lets say 10%, and with that money built her deposit up to 3-5% of the total value of the house.
I think if her take home is 3k, and she has no debt, she should not have major issue getting into house, provided her credit is good. I think that bad roof would be a bigger issue than her down payment frankly.