Hi folks. Every week I receive a lot of questions via email from consumers and my peers, so, I thought I would start a weekly blog series titled “ASK THE BROKER”. Just submit your question on the form below and I will choose one once a week and post my response here.
THIS WEEK’S QUESTION AND RESPONSE
Hi Broker Bryant,
I like your website. Do you work as a buyer’s agent? If so….
This will seem like a strange set of questions considering my current situation but you seem like the guy who could help me achieve this goal.
I have been searching the MLS and noticed your area has a great amount of bank owned properties. I found one that is a nice home for about 60 grand. I have about 30% or $20,000 for a down payment and my wife and I make about 2400 a month. We have a bankruptcy just being closed.
I would like to buy a home after the close of our bankruptcy at the end of Oct and want to know if a cosigner could be used. or other options. I have a good friend of mine and thought he could buy a place and I buy it off him using a wrap around and or other similar contract. But I could not see how this would help him. Also I thought about an owner carry but I don’t think I can find the same deal as the bank owned property using this option. My last thought I we could save for another year and buy a place in Cash but this seems to just waist money renting.
So, how would one go about achieving this goal in this situation? My main goal is to buy a home and then save to buy another and another and so on in order to earn rental income. Our current home is generating an ROI of 13% to 23% per year depending on the market and I would like to do this about 10 to 20 more times and sell at a peak in the next 10 to 20 years.
Thanks for your help, Mr. Want A. Buy
Dear Mr. Want A. Buy,
You are correct that most of the really good deals, in Poinciana Florida, are either bank owned or short sales and in both cases would require a mortgage. If you have a friend or family member who is willing to “invest” in you, they could buy a house as your partner. Their credit, your money and then they share in the appreciation. This is called an equity partnership. They buy the house and then the equity agreement is a separate agreement between them and you. An Attorney would be needed to draft the agreement.
You could possibly find an owner financing but most of these you’ll end up paying more for the property upfront but not in all cases.
And of course you could wait. Values are going to continue to decline. My opinion is that 12 months from now prices will be even better.
Lending guidelines have really tightened up. Having a bankruptcy is going to affect your borrowing ability for a couple of years. Buying investment properties is going to be very difficult unless you focus in on owner financed opportunities or partner with someone who has credit but no money.
The first step would be to have a mortgage broker assess your financial situation.
I hope this helps. Broker Bryant
ASK THE BROKER
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