The bank says 25% down

[realnew]

Well,

I'm on the sidelines for a spell. The old repair the credit thing. I was doing so, and told myself I was going to wait until next spring after everything was paid to zero, but I got caught up in the excitement of finding properties, and let myself be talked into getting prequalified for a loan.

The bank said they can help, but 25% down. can you imagine?

It's a lesson in patience. I've found 2 FSBOs and I want to pursue them, but as I've read, cash is king.   Even if I negotiate the either seller to do a 2nd, oh , I don't know. I'm exasperated now.  Need to go walk, and think of creative strategies.

[Bluemoon06]

20% to 25% down is generally what they want for a commercial real estate loan if you are an LLC or INC.  You should take the information the bank used to turn you down to a mortgage broker that understands real estate investment.  He should be able to tell you what is wrong.  It may not be the amound of debt you have, but how you shopped for the loan.  He may be able to help you.

[Mdhaas]

20-25%?  You must have some skeletons in your closet or you are looking for parameters that are impossible.

[realnew]

There were some skeletons due to downsizing. Score is 580.  I've been steadily employed for 6 months now, but the damage is done.  So, the approach is use the $1200-$1300/month I have free and clear to pay 1 bill per month - and be debt free about March 10th.


While I intended to wait, I started looking at properties so I could identify good neighborhoods and analyze properties, gaining practice working up agreements.  

The plan was - if I found something prior to the March 06 date, then I would make monthly payments on the bills, and use the $1100 surplus from my regular income ($1300- $200 of bills)
(plus the cashflow from the rental) to cover the note /repairs on a property.

[Mdhaas]

I've been steadily employed for 6 months now

How long were you unemployed?

Where are the properties located?

[Bluemoon06]

In general cresit score of 650 to 660 gets you started, if you get with the right mortgage broker you may be aboe to get some decent deal with a 620 score.  Under 620 you are propable dead without a lot of cash.

[realnew]

Mark,

I was unemployed about 3 months last year, but I was underemployed for about 4 months.  

I'm in Maryland.

[DeeinAustin]

What about a hard money lender or private investor? A lot of them look at the property and not necessarily just the score. Of course, you'd have to have an excellent deal, but you can at least get a property as long as it meets the loan guidelines.

[realnew]

I haven't gotten to the stage of meeting with the property owner. I would like to know whether the properties have assumable mortgages.

[DeeinAustin]

Even if it's assumable, it's often with the caveat that you have to qualify...meaning credit and assets are checked, so you're back in the same boat. I haven't seen any loans that were just flat out assumable with no credit check or a laundry list of qualifiers, but maybe they're the rarity.

[kdhastedt]

Wow!  They have tough quals in Texas if they're checking asses!

(I'm SURE that Dee meant "assets"!)

Keith

[DeeinAustin]

HA! That's funny. I'm correcting that post before anyone else prods me. Some typos sure are a lot worse than others!  

[realnew]

You're right, Dee, I wasn't thinking clearly.  I don't think I'm ready to get into this just yet. I'll spend the winter doing research, tightenting the business plan and marketing.   I'm not certain I want to go HML to get $200 cashflow.

[clint48]

When I bought my house I was told all I had to put down was 10%. Just before closing I got a call from the agent saying I had to pay 25% down. I paid it, but it was all the money I had at the time so it was kind of tough the first year.

[swalker90]

I am also in Maryland. What part of maryland are you from? PM me if you might be interested in birddogging for some extra cash to help you get started.