Home Buying in Detroit>Question Details

Lauren, Home Buyer in Detroit, MI

Soon to be college grad- how to acquire start up financing for real estate investments?

Asked by Lauren, Detroit, MI Mon Oct 29, 2012

Hello everyone,

I am currently a senior in college, graduating soon with a degree in Finance. I have been interested in investing in real estate for a while, but my limited credit history/income is hindering my ability to acquire a conventional or FHA loan to start out. I have no equity to use as collateral.

I am looking for advice on acquiring financing to start out (100% financing with higher required return if possible).

The nature of the income producing activities will be rehabbing below market value properties with the intent to flip/hold as rental investments.

Investment Property Characteristics
Price: Maximum purchase price of $75,000
Location: Oakland County, Macomb County, and Wayne County (close proximity to Downtown/Midtown)
Bedrooms: 2
Bathrooms: 2

Rehabilitation work will be limited to cosmetic and minimal structural changes.

I am hoping for some great advice to get into the industry! Thank you for your time.

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Answers

3
Toni Jennings’ answer
Thanks for your interest!

Please feel free to contact me for more information regarding this unit or to schedule a showing!

Looking forward to assisting you.

S. Toni Jennings | Realtor®
City Living Detroit | Redefining Urban Living
444 West Willis, Ste. 108, Detroit, MI 48201
Mobile: 313.409.4740
Main: 313.242.7800
0 votes Thank Flag Link Sat Mar 23, 2013
Email me regarding what you want to do? Ted_Lem@hotmail.com
0 votes Thank Flag Link Wed Oct 31, 2012
That's a great plan, in theory. Isn't school great! As you've suspected, the key is in the financing, which is basically impossible to get for rehab work at 100%. Maybe you can ask your mom? If financing were easy, then there wouldn't be anybody doing rehab work. I'm sure you've covered that basic economic concept in your finance degree, so I'll spare the explanation.

Without a solid credit history, you'd be lucky to get 50% financing from a private lender at 10-14% interest rates. So, you should get your start working for an experienced rehabber and earn some money. Once you've got $30-50K in scratch, then you have the chance to make some money.

If you ever muddle through b-school, you'll get your fill of amazing stories of the masters of the universe pulling off LBOs and squeezing out tens of millions in the process. Even for them, they can't do it with 100% financing.
Web Reference: http://www.archershomes.com
0 votes Thank Flag Link Tue Oct 30, 2012
Yeah, those are two of many creative funding sources. They can probably get you 60-70% of the money you need. That last mile is the key.
Flag Tue Oct 30, 2012
Thanks for your advice. I figured so, I've just seen some creative funding lately via hard money lenders and crowd funding sources. I definitely will have to hold off on investing for now, but hopefully not for long!
Flag Tue Oct 30, 2012
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