Posted by KenS(WV) on September 27, 2003 at 15:13:25:
Lyal,
The best I can get someone financed for through a conventional lender is 5-10% down with a 620 credit score. I have a lender that won’t let me buy their repos but will let me broker them and they will do credit scores on their own repos down to a 590 score. My Lonnie deals are typically on homes older than 10 years old or on 2 bedrooms homes that don’t move as quickly. I go down to a 550 score, check references and always get 20% down on in house financing, period. My market supports this and I can sell every home I get.
Posted by KenS(WV) on September 26, 2003 at 09:26:05:
I do my business a little differently then the “true” Lonnie dealer. I buy lots and lots of repos from banks. Mostly all late model, '95 and newer. I have several lenders I work with to get my buyers financed so almost all of my deals are cash to me. I do Lonnie deals on occasion but there is so much low hanging fruit in the repo business with so much cash that this is my primary focus for at least the next year. You need to have cash to get started, but you almost double your money on every deal and don’t wait for the cash!
One catch might be that I went through the full blown dealer licensing in my state: city license, state license, contractor license (which required examination), DMV license, and State DoL license. You might need to be officially licensed to deal with some lenders as a dealer.
So if you need to borrow money to do deals, I can’t help you. If you need contacts for lenders for your buyers, I have some. The best way is to snuggle up with your computer and use Google.com to find lenders. In about two days you should be able to find several to work with. It is time well spent.
Ken,
I know we talked about this at the seminar but, what do you do for down payments for these people. From what I’ve seen, finding a low credit score lender is only half the battle. The worst part is the buyer coming up with money for down payment, insurance, rent deposit and first month’s rent with the park.
What’s your “fallout” rate for these homes / buyers (how many of your buyer’s fail in the first year and the home goes back to the lender)? Do you ever buy any from a lender for the second time?
All the best, Lyal