Need $$ w/ No Income Proof - Posted by Simi

Posted by Dr. Craig Whisler CA NV on September 06, 2003 at 16:34:50:


Need $$ w/ No Income Proof - Posted by Simi

Posted by Simi on September 04, 2003 at 17:18:36:

To purchase a trailer home, I’m looking for a source of financing that DOES NOT require proof of income, being self employed. I need to purchase soon.

Appreciate any and all help, direction, advice.

If you aren’t just looking for a free lunch… - Posted by Dr. Craig Whisler CA NV

Posted by Dr. Craig Whisler CA NV on September 05, 2003 at 11:38:19:

…there is a way.

As with any other ‘way’ you will have to work ‘way’ hard. Hard money loans do not require income or proof of income. They are based strictly on equity. You don’t need a job. You can even have bad credit or no credit at all. Yes, they do cost more in terms of interest and points but they are always available sin my area, easy and quick to get, AND you can use them for mobile home/land combinations. They are not, to my knowlege, available for mobiles only. You can even get loans OVER 100% of your purchase price in some cases. Hard money loans primarily use private investors’ money, and are normally available through mortgage brokers (not mortgage lenders). They have some problems though. They are generally short term, such as 3-5 years, and they rarely will lend over about 65%-70% of appraised value (purchase price is irrelevant). The key to hard money loans is that you either have to have a large (25%-30%) downpayment OR you need to be able to buy at 65%-70% of value or less. The latter is the easiest to learn to do. Note carefully that I didn’t say it was easy to do. I just said it was the easiest of the two alternatives mentioned above.
In a seller’s market it generally fairly hard to buy a nice single family house at 1/4-1/3 less than market value. Why should any seller discount a nice house in a seller’s market? But I have found that even in seller’s markets it is possible, with enough effort, to find a land and mobile combo at such discounts. Often they are abandoned properties or fixers or in slightly less desireable neighborhoods. Raw land seems easier to buy at a 30% + discount. I have bought many lots and installed the utilities myself. The profit I made by doing my own work resulted in having 30%-50% equity, which made it EASY for me to get hard money loans when I was just starting out. Yes, its a lot of work to install your own utilities and you need to find a hard money broker who will work with you and provide 100% of the development money. It will be much easier after you have done one development to get counstruction type hard money loans for
your second project, and so on. I suppose technically you could even pay market value for your lot if you develop it yourself and still have it cost you no more than 70% of market value when finished because your sweat equity should result in a 30% or more overall savings. You will have a difficult time finding hard money lenders who will work with you to provide purchase/development money rather than to just finance a finished lot and mobile combination but keep trying. I was able to get a couple of lots at about 50% of actual value and I found a couple of repo mobiles at super low prices. My first hard money lender immediately recognized that I had negotiated some great buys and was willing to put up 100$ + of the money for the lot purchase, utility installation, mobile purchase and mobile installation. I was even able to get a few thousand dollars in cash on most of my deals when I first started. Oh course they I didn’t get any cash until the project was finished and it was clear that I was still well under the 70% loan to value ratio of my lender. For example if my total costs ran 61% of value, he just gave me the other 9% in cash. I lived on that cash while developing my next deal. As long as I could do a deal every 6-8 weeks I could live without holding an outside job (ug!)Later I learned to look for simpler deals. I searched for vacant lots that had already had the utilities installed. They I bought the lots and used mobiles using 100% hard money loans. You really need to finely tune your buying and negotiating skills to do this but it DOES work. I did it and I can STILL do it. YOU can do it too. This is a GREAT way for biginners to get their start with no money or credit or with no money and bad credit as well as no job. You can start with nothing and end up with a lot of positive cash flow property.

Regards, doc

Re: Need $$ w/ No Income Proof - Posted by Phil Pelletier

Posted by Phil Pelletier on September 04, 2003 at 17:50:08:

I believe ALL rental properties require some kind of proof of income. If you find a rental home on someone elses land, they might rent to you based on a large deposit, but all the communities in my area (Oregon) require proof of income.
Phil Pelletier

Re: If you aren’t just … - Posted by Igor

Posted by Igor on September 05, 2003 at 20:27:43:

But of course its better to start with some money, say 10-15k. So that you can pay for everything in cash, not including the land of course. But my idea to start is just to move repo MHs into parks with high land values.

I respectfully disagree with you Igor - Posted by Dr. Craig Whisler CA NV

Posted by Dr. Craig Whisler CA NV on September 06, 2003 at 16:13:44:

I feel that it is a MAJOR handicap to start with adequate capital and great credit.

They will become immediate crutches that will allow you to function passibly with out learning a thousand new street-wise techniques that could be so valuable to you in future deals.

When the salesman for the school of hard knocks, knocks on your door, don’t just open it, rip it of the hinges. There is a lot to be said for knowlege gained from practical experience. If you don’t have the advantages of capital and credit when you start out you will be forced to learn dozens and dozens of creative ways to do deals without either of them. Then when you finally do earn and save up your own capital you will have the superior advantages of having capital, credit, AND streetwisedness. They don’t call me the streetwiseacre for nothing. I’ve singlehandedly eliminated so many Big Macs that I now have my own zip code.

Yeah yeah, I know half of you opened this post because you were intrigued by my use of such an unsightly word as ‘respectfully’ in one of my posts: it being so out of character for me.

See the ‘killer’ post below for more slop on writing ads with intriguing titles.

Regards, doc

Re: I respectfully disagree with you Igor - Posted by Igor

Posted by Igor on September 06, 2003 at 18:27:15:

Well, I think you make a very good point. Right now I don’t really have capital or a developed credit. I’m still in college and one of my friends told me about REI a couple of months ago, and I think its a great idea. I’ve been doing alot of research and also trying to educate myself, and I think MHs are a great starting point. Maybe I can start with no capital and no job, but I just have no idea how. This is why I think I should get Deals on Wheels (and use this board too of course!), to get some ideas. Oh, and one more question, did you start a company as a first step? Is that a good idea and first step?