How to create 25k in new equity from just 5k
I will now show you how you can own a new rental house with just 5k down. You will need a 620 credit score or above and some verifiable income. I have found many companies out there that will purchase a fixer home at less than 65% of appraised value. They will REHAB the house and put you on title to the house. Once you are on title , you do have to pay this company a 5k fee. Here is an example, you will have a note between you and this company for 75k. They will find you a tenant for this property. Once you have the tenant you go to a conventional lender and refinance that 75k loan into a new 30yr fixed rate loan. Your new payment will be $ 585.0 per month. This will be a nice new REHABED house that a tenant is paying 950.0 per month. You will end up with $245.0 per month of positive cashflow after taxes,insurance and property management. You will also have 25k in EQUITY. Once you have saved up 5k again then repeat this process until you are wealthy.
October 10, 2009 at 6:40 am
Sounds intriguing. I have a great credit score and some verifiable income
but it’s low. Still, 5K cash is easy if someone would give me a chance. Is
the 5K fee the same for any priced house?
Thanks Gordon
October 10, 2009 at 11:20 pm
it is for any priced home but most homes are under 150k because these are the ones that cash flow the best. What city or market would you have an interest in? I can give you an idea of price points along with monthly rents. If the house has good cash flow ,a person doesnt need a great income because the rents will offset the mortgage payment and help the person qualify.