Anyone bought Real Estate using a personal bank loan? FTB D:

[bigmark848]

Hi Everyone,

I understand that I need 2 years w2 to get a mortgage. Unfortunately, I only started my company this year and will only have 1 years taxes when I want to buy(Summer/Fall 2011).

The only other options that gives me is seller finance or a personal loan from a bank.

Seller finance is ok but it greatly reduces the homes I can purchase. A personal loan is a higher interest rate but I believe I can get one for around $25,000 from my bank. I'm looking to buy a $150,000 home with $125k down.

I would really appreciate some advice on personal loans or any other options. I'm pretty new to RE and at the moment am just intending to live in this property(may add roommates later). Thank you in advance.

Mark.

 

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[NoMoneyDown]

First off, do NOT put $125k down for a $150k home that will be your personal residence. If you do, your money will be locked up in the home when it could be out there making MORE money for you. If you can, find a good mortgage broker who can find you a reasonable loan given your circumstances - that's a big part of their job. Like anything else, though, the good brokers are hard to find, so ask around. Then use the bulk of the $125k for other things that will accelerate your financial growth, rather than having it sit idle.

 

[Bilgefisher]

He's 100% correct. Idle money is wasted fuel. With 125k you can control over 500k of real estate just using conventional loans. Bought properly you can easily get over $1000 positive cashflow on investments and still have plenty of safety reserves. More than enough to cover your mortgage, while still building your net worth.

That's just one example. Heck, read Sonya's story. They started with 60k to build a self storage facility.

While its your money, having it locked up in the equity of a house actually costs you money. Inflation is an enemy that will erode the value of that tied up equity.

 

[Runum]

Welcome to the fastlane BigMark. It would sure help us help you if you would post an introduction in our intro section.

Introductions & Networking

It's hard for us to give you sound advice if we don't know a little about you. You could tell us where you have been in life, where you are now, and maybe where you want to go in life. Maybe throw in some life lessons. We've got 4 years of incredible information here and we welcome you to add to it. Good luck.

 

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[CommonCents]

check with friends/family about a private mortgage. They can be a win win. You get a mortgage, they get a decent return over CD rates with collateral of your home. You could do it for a shorter period of a couple years until you get some earning history for a conventional mortgage. Also, consider other private investors for hard money loans. (higher rates of course.)

 

[hakrjak]

Requirements for local/portfolio banks to fund you are typically stiffer than Fannie/Freddie standards used by the big national banks. My local banks want 20-30% down before they'll even talk to you. They'll also want to see the same income info that the others are asking for. The days of stated income loans are gone, my friend. There is no easy money out there right now. Even if you get a hard money loan for a home, it can be 6+ months before a bank will talk to you about a refi now.

Cheers,

-Hakrjak

 

[bigmark848]

Hey Guys,

Thank you very much for the welcome and the advice.

I know I could control more RE but I want to wait until I understand it better. At the moment I want continue focusing on web-based businesses and just want to own 1 property completely so I don't have to worry about getting into trouble. D:

Also, I've heard(might have been mentioned in this thread) that banks are sitting on a lot of foreclosed homes and are not releasing them into the market because they don't want to flood it. Is there a way to get access to these homes if you can them out fully?

Thanks again guys,
Mark

 

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[Red]

I know I could control more RE but I want to wait until I understand it better.

Then why make a decision to buy? You're still jumping in without full knowledge of the industry. I would suggest putting plans to buy anything on hold until you, in your own words, "understand it better."

There is no shame in renting until you figure out what you want to do, it serves a purpose and, in many areas, is still cheaper than buying, which can mean more capital in your pocket for your online endeavors.

When you come to a forum of seasoned entrepreneurs (excluding myself) and receive a resounding answer in unison, it's probably decent advice... even if you don't follow it in the moment. Think about it.

 

[SEOArbiter]

Given the current economic climate, I certainly agree that it isn't a bad idea to rent a while to first see what you really want. That would be ideal.

 

[Neville]

I am an investor and like off-plan a lot. I Invest only a fixed amount of money and not everything and until prices will rise I think this is best solution for making money.
If you pay only 50000; for example and price goes up for 5% you are actually getting 10% rise. It's almost you would be using leverage on stock market.
Of course from view of holidays I would prefer ready made property. Also I think until prices will rise at current stage it will not be possible to make more money with renting property than reselling.

 

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[Genoveva]

The easiest loan would be to get a commercial loan. And if you have the credit worthiness to get a personal loan, please consider purchasing a multi-unit apartment. This would help you to leverage your capital better with many benefits. By the way, many of these commercial loans are fully assumable. You will definitely get more bang for your buck!

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