Posted by Anonymous on January 09, 1999 at 18:41:36:
Wow did your followup post speak to me. I had a similar experience
about 2 years ago.
It was about the 6th mortgage broker I had spoken to in around 2 weeks, and I had heard all the negative stuff before, but just the way this particular broker said Whoa! This is colorful!" when she looked at my credit report, made my throat close up and the tears come to my eyes. And here I was a 30 year old woman bawling like a baby on the phone with a perfect stranger. I felt like a complete and utter failure because I could not qualify to buy a house.
Well you are in the right area. I wonder how many investors here BECAME investors because they had no other way to buy a house, other than creatively. You ARE in the same situation as thousands of others. I started to clean up my credit file and educate myself in the ways of creative real estate. I have since purchased the home I live in and one rental property.
I am no millionaire by any stretch of the imagination, but I just put one foot in front of the other until I came to where I am today. And there is still a long ways to go. And I still get frustrated sometimes. But I just use that frustration to know that I can do better and keep growing and improving. You will do the same.
Please have faith in yourself and hang in there, you have a lot of company.
I have been reading posts from this site for 3 months now.
I am really interested in this “creative financing” thing, I believe this is the only option left for someone like me. But, when I talk to realtors and lenders, they seem not to know anything about creative financing. I have a bankruptcy that is only 5 months old, I make 50K a year, with yearly raises. Each time I talk to a realtor who then directs me to a lender, they can’t do anything for me.
I know there are a lot of people out there who are just like me (make pretty good money, but bad credit) But the realtors and lenders aren’t paying attention. There is a whole new nich for people like myself. Can anyone on this board give me some insight on what I can do so that I can get myself a house using creative financing? I am a newbie and I am still learning about all of this real estate stuff.
I have plans to do Lonnie Deals (reading his book) but in the mean time, my apartment rent is exceeding $500 a month and I just want out of this dump, and pay for something I will own.
Re: Whats wrong with realtors? - Posted by Russ Sims (WA)
Posted by Russ Sims (WA) on January 09, 1999 at 21:05:05:
Thanks in part to advice by JPiper and others on this board, I just lease optioned a house out to a couple with a bankruptcy.Also checked with two mortgage brokers and they both agreed that after one to two years, this couple will be “mortgageable”.You just need to find someone with a lease option that understands bankruptcys and convince them you’ve cleaned up your act. They know that by the time you excercize your option in 12 to 24 months you will have made great strides in mending your credit.
My suggestion would be to consider talking to your landlord about buying your building, have him carry financing. Take the DUMP and turn it into a great place to live for others and yourself.
Pat
Re: Whats wrong with realtors? - Posted by Doris - Va.
Posted by Doris - Va. on January 09, 1999 at 19:23:37:
You already have a big advantage over many of us. You are earning 50k a year!!! That is three times more than a lot of people - including those who have had a recent BK.
It is possible for most people to live on half of that or less - especially with no debts now. You could easily save enough to get started in CRE and in no time you would be ready to buy the house you want. Live cheaply now to live in luxury later.
Re: Whats wrong with realtors? - Posted by Cathryn
Posted by Cathryn on January 09, 1999 at 18:10:51:
I agree with Jim Piper. Patience is the first step towards self-discipline, and it sounds as though you need some self-discipline.
Reread your own post. You seem to feel that a realtor should 1) teach you all about creative financing, something that instead you should learn on your own and 2) that five months after a bankruptcy, lenders should forgive and forget.
When a person declares bankruptcy, they are, in effect, hanging a sign around their neck that says to the financial community “I can’t be relied upon to pay my debts.” (This is something that bankruptcy attorneys never seem to emphasize much.) My personal feeling is that very few people go bankrupt for reasons that don’t involve at least a few bad choices that they made. Even a percentage of people who are laid off or are overwhelmed by medical bills might have avoided bankruptcy if they’d had some savings to rely on.
(And please don’t get me wrong. I don’t know your situaion, and it may be that you had savings, lived within your means, and still somehow caught in the bad debt trap. But since so many people get into that kind of situation because of bad choices, it’s unrealistic to expect lenders to ignore it.)
You want to get out of your “dump.” Is where you live really so bad? Or can you bear it for awhile? If so, save and study. With an income of $50,000 a year, you have a chance to get far ahead of everyone else when it comes to accumulating money for investment. And I hope you’ve learned one of the most important lessons… always live a little below your means and always have some money in the bank, so that financial disasters (and they will continue to happen!) don’t knock you for such a loop. Good luck!
Re: Whats wrong with realtors? - Posted by DanM(OR)
Posted by DanM(OR) on January 09, 1999 at 17:07:32:
Supercar,
If I were you I would heed Jim’s advice. He’s is a very experienced investor who’s advice I respect greatly.
One twist to his advice I might suggest is maybe learn all you can about Lease/Options and try to get yourself into a house on an L/O.
Buy Bill Bronchick’s L/O course, save a couple thousand (you may need it to entice a seller), and find a home to L/O for 3 years or so. After you are in the home for a year maybe you could then L/O it to a tenant/buyer. By then your situation maybe different. Hopefully, you would have listened to Jim and had some money to work with and a cleaner history.
Just a suggestion. Any alternative to throwing money out the window(rent) is a good idea.
My recommendation to you would be to stay where you are, in your apartment.
You need time for your situation to settle down, and to regroup. Bankruptcy is a serious and major event. It?s the culmination of a wrong direction. While I don?t know the reason for the bankruptcy, regardless of reason it most often reflects a lack of financial discipline or responsibility. This is something you need to learn about?..and 5 months is not enough time to have learned.
First, bankruptcy is not the end of the world. There is life after bankruptcy. The law gives you in essence a fresh start, except that people are going to be somewhat wary of you for a while. I would take this time to save some money. You should be able to save because you now have no debts. I would try to reestablish some type of credit. I would make sure I paid this on time religiously. You cannot afford any further credit issues. If you have ANY, even as little as a 30 days late, or a small collection, following a bankruptcy the lenders will turn against you?.they will feel that you haven?t learned your lesson.
A year from discharge the non-conforming lenders will look at you. In 2 years FHA will look at you (from discharge). Last I heard conventional loans were available 3 years after bankruptcy.
Of course any time the creative market is open to you. I would take this time to study creative financing. I don?t mean just reading the posts. I mean studying the ?how to articles?, reading some books, taking some courses. You need knowledge, and right now you don?t have it.
I would not step into buying a house to live in (read consume). Rather, I would learn to buy and sell?.starting with mobile homes sounds like a good plan. Stack some cash up. Build a future for yourself. AFTER you have done this, take a look at buying yourself a home. Live with discipline for now. Study, save, rebuild. That?s what the upcoming period should be for you.
Your situation is exactly the kind of situation “you” need to know about “this creative financing thing”. You need to figure out which creative technique is going to work for you to accomplish what you want. Realtors and lenders are busy doing what they know to make money. You must figure out what you need to know to enable you to buy a place of your own or at least set yourself in a direction to reach that goal. I would suggest to continue your education, buy one of the courses on this site. Become a sponge. Save up cash to use as leverage. No matter how creative you get, cash always gives you more options.
In your situation, you may find a lender for a first mortgage, but it will cost you…which may be the price you have to pay. Lenders basically ask themselves three questions about a deal:
Can they pay?
Will they pay?
Does the property offer proper security?
You’re coming out of backruptcy. If you had money to lend, how much would you lend to someone like you?
I think your best bet would be to find the best Lease Option deal you can. This will set you up in the right direction and give you time to improve your credit. But then you have to prove you will answer those three questions appropriately.
With the money you make, you should be able to improve your situation fairly quickly. Otherwise there’s more to the story than you’re telling us. Please don’t take this the wrong way. I’m just trying to offer some constructive thoughts. All realtors and lenders can’t be all things to all people. If you look hard enough though, you’ll find one’s you can work with, but you have to do your part.
Re: Whats wrong with realtors? - Posted by Jason-DTX
Posted by Jason-DTX on January 09, 1999 at 15:36:28:
You’re probably just talking to the wrong realtors and lenders. 90% or more of the realtors are’nt familiar with creative real estate. As far as lenders go you’re probably talking to A lenders. Try finding some B,C,D lenders.
I would agree with Dirk and find a house that doen’t require a realtor or lender. However if you ever need a good realtor or lender you will just have to keep looking, they are kind of hard to find.
It’s better to find professionals who understand what you are talking about, rather than trying to educate them.
Good Luck
Jason
Couple of things caught my eye in your post - Posted by Dirk Roach
Posted by Dirk Roach on January 09, 1999 at 15:11:26:
Hi Supercar,
When you say “I believe this is the only option left for someone like me” it makes my eyebrows raise a little, needless-to-say the hair on my neck.
I think that is a dangerous mindset for anyone to be in. There are always options.
Let me aks, why are you even talking to realitors. There are several How-To Articles which explain how you can get yourself into a nice home. I would suggest re-reading them.
As far as Lonnie deals are concerned I hope that your worries about your credit won’t taint you on them. In fact I honestly can’t see were credit is a big deal at all, in regards to them.
Just a couple of thoughts, and change that attitude,
Dirk
Didn’t mean to have a bad attitude. I was talking with a realtor this morning. She had an ad in the local news paper that said “Hud, 0down, want first time buyers” looked good to me, so I have her a call. I gave all of the info that realtors ask for (ss#, credit background, income, etc). After spend several minutes giving her this info, her tone immediatly changed and said, well you don’t qualify, your bankruptcy is a major strike and you make to much money."
I asked is there anything out there that a person like me could use, like other programs or something. she replied “no not really. Give me a call in about a year when your bankruptcy is older. Hopefully by then we can do something.”
I was expecting her to direct me to some creative financing avenues, but it was apparent that she is not hip to any.
I am just frustrated. As for Lonnie deals, I know that my credit does not matter. I mentioned that so that people who read my post will know that I am in the process of making a change to have a better financial future. I had to let my possible first Lonnie deal go, because of lack of knowledge. But, I am learning. I appreciate your encouragement.