I just started a real estate buisness. I own 2 properties outright as well as my own home. I make about $1000 a month off of the rentals. I make about $3750 a month from my job. I only have 12K in debt and about 75K in equity. I live in a Detroit esque mid sized city in the midwest where you can buy houses for 10-15K. They come with the windows boarded up and I went to school for home inspection so I don't get any that have major problems. I was wondering where could I get financing from? I could pull equity from my rentals but that would diminish my income from them to almost nothing. I don't have enough time doing this to get a business loan (2 years recorded on taxes). So what are my options to do more properties? I could just keep buying them cash but that means I can only do 1-2 properties a year. I'm tired of my job and want to do this full time. Any advice anons?
I've been living frugally since I was homeless back in 09. I buy all my clothes/furniture/cars used, grow and can my own food, and I own all my own tools for every project from hanging drywall and framing to installing flooring (I bought all the tools from a tool pawn shop in town). I'm just wondering where I could get a business loan from, my credit is over 700. Or are there any investors or a place to talk to investors?
So people are actually willing to live in those homes that cost $10-15k?
If I knew you personally I'd consider investing with you. Maybe you can network with people locally and try to solicit investments that way somehow.
This is what I wanted to do. Specifically in detroit. Like a moron I got talked out of it. I own homes in Colorado now that have made me great return. Why can't you get 30 yr mortgages? Put down 20 percent you could buy a house a month
Im sure its all getting paid through government vouchers.
Its a gamble though. The people that would live in these houses could absolutely destroy your investment.
I have been thinking about doing this as well though.
OP would you recommend family sized homes or little 1 bed room homes or even like 4 bed rooms? I have this image of renting to the single mother and the kid and the boyfriend end up tearing the place up. However there is such a lack of little single bed room houses in my area.
A 15yr 7.5% blanket loan over your current equity will cost you $375 per month. You will then be able to buy 2-3 more rentals which extrapolating your current 2 would give you a gross rental income of $2000-$2500, subtract out the $375 you now owe on your blanket loan and you should be clearing $1625-$2125, owing only $40,000 across 4-5 houses which should be worth well over that amount, and depending on who you get the loan from once they're rented and added to your portfolio they may be willing to re up your loan so you can buy even more houses.
Call every bank in your area and call any of the we buy houses signs and explain your situation and tell them you're looking for a loan. The we buy houses people usually have good connections to money and can even help you find a new rental as a pseudo real estate agent if a landlord calls looking to sell a house.