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Merry, Other/Just Looking in Anaheim, CA

I like to buy Apartment building,Can i buy with very low income and low down payment?

Asked by Merry, Anaheim, CA Tue Jul 10, 2012

hi, i like to buy Apartment building,6 unit or more,Can i buy with very low income and low down payment.my friend said i can buy with no money down and use rental income. i do not have job so i can manage full time if any one can help i will appreciate. thanks

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Hi Amir,
Most banks will consider only 70% of the rent as income to you. I have not seen any lenders lately going with no down loans on commercial property.
I think right now the lowest you can get into something would be to do 4 units and go FHA with 3.5% down. You will be required to occupy and qualify for the loan with income enough to cover your unit and 30% of the other 3.
I think youir friend is off in his information.
Best of luck to you,
Connie Bramble
Prudential CA Realty
714-337-8718
0 votes Thank Flag Link Tue Jul 10, 2012
How bout very good income and big down payment?
0 votes Thank Flag Link Tue Jul 10, 2012
No....you need at least 30% down and a FICO score of at least 680 (approximately).......of course, there are exceptions to every rule but this is a good guideline....

Get a job, improve your fico score and buy a 4-plex to live in using FHA financing to get a start in real estate investing.

Good Luck!
0 votes Thank Flag Link Tue Jul 10, 2012
No, doesn’t sound like your friend knows what they are talking about. Good luck,

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time
0 votes Thank Flag Link Tue Jul 10, 2012
Hi Amir, one way to buyis to get a partner so he can help you get the loan.
Msince you do have a job, you can try to find units that offer seller financing, and thye usually require larger down payments.
On 4 units or less, you can buy the units formas little as 3.5% down payment assuming one had a job and resoanble criedit.

I would be glad to talk about your unique situations and what can be done...
Feel free to contact me.
Mike
0 votes Thank Flag Link Tue Jul 10, 2012
Amir, ask your friend if He (or She) has ever preformed this Commercial Real Estate No-Money Down Transaction and if so have them walk you through the steps on how to do it. While I have done many real estate transactions structured without a cash down-payment, the purchaser was always strong in the 3 C's of underwriting: CREDIT, CAPACITY, COLLATERAL.

If you are currently unemployed, I can only hope that you have great credit and a large trust fund to balance out the lack of income.

On a positive note, you can look for properties owned by "don't wanter's" who will accept an owner financing arrangement that does not require any bank loan at all. But still you will need some money to repair such a property to a rentable condition. Most "don't wanter" properties tend to have physical or financial problems that need to be fixed before you can expect someone to rent them. If you can find such a deal, be careful of the price. Anaheim may be too pricey to get this deal to bring a positive cash flow. Stay open to one-to-four unit rentals, they are more abundant and easier to get a loan on should you want to refinance later.
0 votes Thank Flag Link Tue Jul 10, 2012
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