I want to invest in real estate?

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I have no money what-so-ever and I wanted to know that if I get financing for a mortgage loan for lets say $ 60,000 and I find a house that I want to rehab and it cost $ 40,000, and it needs $ 15,000 in repairs, Am I able to get the whole $ 60,000 for the house and for the repairs and keep the remaining $ 5,000 in reserve for the mortgage payments until I am able to find a buyer for the house? Please no, Yes or No answers. Please explain in detail if there is anything else I can do if this is not an option. Thanks in advance.

4 Comments
  1. Reply
    satouqi
    April 30, 2011 at 12:41 am

    What if you do not find a buyer for your price?

  2. Reply
    sdmike
    April 30, 2011 at 12:54 am

    No. It is not possible, but it is a common question.

    It comes down to this. There is no free money. There is no sure thing.

    You can make money in real estate fixing up houses, but you have to have more reasonable expectations – and some cash.

  3. Reply
    Kenneth D
    April 30, 2011 at 1:34 am

    If you have good credit this is possible through a rehabilitation loan. Check out hud.gov and look at the 203(k) program. Also, check with a local mortgage broker. You may not be able to pull out the $ 5,000 for the payments but some programs do not require payments during the rehab period.

  4. Reply
    DealFiles
    April 30, 2011 at 2:09 am

    You’re really asking two questions that are important when you are thinking about beginning real estate investing. First, can you get a mortgage for the whole cost of the house plus fix-up costs. Second, do you have any other options? The answers are “No” and “Yes”. Here are the details:

    First, traditional mortgage lenders will not loan you 100% of the value of the home, and they typically will not loan you money for repairs. There are lenders, known as hard-money lenders, that will do this, but the cost of borrowing their money is very high and, unless you have a lot of rehabbing experience, I do not recommend hard money.

    Second, you DO have other options for beginning real estate investing, and you should seriously consider them. Learn how to easily tie up the deal and then wholesale it to another investor, at least for your first few deals. You can earn really good money finding and wholesaling property to experienced investors, and often they will teach you what they know while you’re building up your credit and bank account.

    There are other methods of investing without using any of your own money or credit, like lease-option and subject-to, but by far the best way of beginning real estate investing, in my opinion, is wholesaling. This will give you a foundation in property values and repair costs in your area before you risk any of your own money.

    All the best,
    Tom Dunn

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