I was reading about a company that offers financing with NO CREDIT CHECKS. For a wanna be newbie investor, with bad credit, wondered if it would be worth it to use a service such as this starting out to perhaps purchase an income property?

They basically use investors with good credit ratings to purchase your home of choice (within their parameters) and then sell it to you. The basics are below and their markup in price after purchase is basically their fee + 2-3% closing. I would pay 9% interest with them rather than the subprime rates at the bank.

Just wondered the thoughts of more experienced investors?

Thanks, Robyn
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Home you find has a market value of $100,000.00. Buyer is willing to negotiate the price of the home and sell to us for $90,000.00 cash.

We offer to purchase home for $90,000.00 and make an offer that is accepted. We issue a Sales Contract/Option on the home and set a closing date.

We offer to sell you the home at near $100,000.00 with no credit check and no qualifying.

We issue an agreement with you to purchase the home with a 5% downpayment and 2-3% closing costs.

At closing the deed is signed and title is transferred to a trust on your behalf. You have full ownership rights. You must attempt to refinance within 1 year on your own.
**NOTE: Please keep in mind that we MUST purchase the home at below appraised value in order for this program to work.

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Robyn Hudson
Evergreen Realty
Orange County, CA

Six of one, half dozen of the other. Read the terms again.

The problem is that they only do this with properties sold below market, then they buy it and offer to sell it to you at market. You go to all the trouble of finding a property below market then this finance company goes and sucks up the equity as a finance charge in addition to the normal interest they charge you.

This plan might be OK for a buyer with bad credit who wanted a property to live in, but not for an investor since it's impossible to buy property below market.

And don't forget you have to re-fi the house on your own within a year!

This is a shaky deal, reminds me of those "we tote the note" sleazebag used car lots where they finance the car hoping to repo it later.

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Jason in Dallas
Telecom Sales and Service Manager
RE license coming soon

Robyn,
This is not a good choice for an investor. The key for you is how much you can put down on the property. Contract for deed would be a much better option for you. Also try looking at rehab properties or possibly pre-forclosure properties. There are bargins out there you just have to look.



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Paul Oaks
Broker\REALTOR
Coldwell Banker

Thanks for the advice!

Guess I'll continue learning the ropes and the sub-2 process....sounds like this may be the best bet to possibly get ahold of some deeds without the (my) problems with financing.

Thanks.

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Robyn Hudson
Evergreen Realty
Orange County, CA

[This message has been edited by robyn0116 (edited 10-05-2004).]