First Time Buyer -- Can`t Figure Out How I Obtain Money

[Coopje]

Hi there,

I have read Mr. Campbell`s Real Estate Investing in Canada and I have done lots of research on good markets. I know I am ready to commit to this but I don`t know how to get money to commit to me!

Here is my situation. Can anyone provide input on how to proceed?

1) I own my principal residence. However, I have very little equity in it as I`ve only had it a short time.
2) I purchased a second residence to rent to a family member (I know! Bad idea!) and I have basically no equity in that one either since I`ve only had it for a year
3) I have no savings or line of credit
4) Based solely on my personal income and debt, I could still qualify for enough mortgage to buy a rental property in the city in which I`m interested, provided I have a downpayment.

Ok. Where do I get the downpayment? How do you guys do this?

Do I hit up family or friends for a loan for the downpayment?

What is a joint venture? Is that how I should proceed?

I`ve been thinking that maybe I should come up with a way to raise the money from a group of friends/family and a repayment schedule instead of getting any mortgage at all. Is that done?

Anyway, I`m just not sure what to do. Any insight would be greatly appreciated!

Thanks.

 

[Nir]

go to the bank next week and apply for non-secured line of credit $50,000 or highest amount they are willing to approve. expect prime+3% interest. ask for interest only payments.
you will be able to use that as down payment. also sell one of your properties to have the cash required to buy a better income generator property. start with your goal so you can answer the above. cash flow? appreciation, both? it`s a bit surprising you mentioned you read Don`s book and not sure how to proceed. cheers.

 

[Coopje]

Thanks for the feedback. I`ve tried to get a line of credit but they won`t give me a non-secured line of credit. They always want to re-mortgage my house. Without enough equity, they won`t give me what I need. So, I`m not sure. But maybe I will try again. I would be lucky to break even on the second property if I sold it (this was done before I had any real knowledge so I made a bad choice there) but definitely am thinking of doing that to at least free up my credit for a better investment.

Don`s book mentions lines of credit but it really doesn`t tell a person like me who has had no luck getting her hands on any downpayment money so far through a line of credit how to proceed.

I am not deterred and will figure this out eventually.

QUOTE (investmart @ Feb 13 2010, 09:15 PM) go to the bank next week and apply for non-secured line of credit $50,000 or highest amount they are willing to approve. expect prime+3% interest. ask for interest only payments.
you will be able to use that as down payment. also sell one of your properties to have the cash required to buy a better income generator property. start with your goal so you can answer the above. cash flow? appreciation, both? it`s a bit surprising you mentioned you read Don`s book and not sure how to proceed. cheers.

 

[fumbrunner]

QUOTE (Coopje @ Feb 13 2010, 10:10 PM) Thanks for the feedback. I`ve tried to get a line of credit but they won`t give me a non-secured line of credit. They always want to re-mortgage my house. Without enough equity, they won`t give me what I need. So, I`m not sure. But maybe I will try again. I would be lucky to break even on the second property if I sold it (this was done before I had any real knowledge so I made a bad choice there) but definitely am thinking of doing that to at least free up my credit for a better investment.

Don`s book mentions lines of credit but it really doesn`t tell a person like me who has had no luck getting her hands on any downpayment money so far through a line of credit how to proceed.

I am not deterred and will figure this out eventually.




You may want to consider having your home re-appraised.  If the value as gone up, you would be able to access a HELOC, assuming your debt ratios are ok

 

[housingrental]

You might want to wait.

You sound too leveraged without much expertise.

If you find the funds for the down payment on your third home and purchase immediately your risking putting yourself in an even worse position.

Earn more money. Spend less. Learn more about real estate investing while your doing this. Pay down your mortgage. Turn your first investment around or pull the plug on it. Take out a HELOC when possible. Then buy third property.

 

[Thomas Beyer]

QUOTE (Coopje @ Feb 13 2010, 07:40 PM)
Any insight would be greatly appreciated!


NOT BUYING is probably the right decision right now. Get your own finances and education in place FIRST.



Learn the business FIRST.



Make some money .. then and ONLY THEN buy more real estate !



Related posts:



5 ways to make money http://myreinspace.com/public_forums/General_Discussion/61-3347-5_ways_to_make_money.html



How to get started http://myreinspace.com/public_forums/General_Discussion/61-4391-How_to_get_started_.html

 

[gwasser]

QUOTE (Coopje @ Feb 13 2010, 06:40 PM) Hi there,

I have read Mr. Campbell`s Real Estate Investing in Canada and I have done lots of research on good markets. I know I am ready to commit to this but I don`t know how to get money to commit to me!

Here is my situation. Can anyone provide input on how to proceed?

1) I own my principal residence. However, I have very little equity in it as I`ve only had it a short time.
2) I purchased a second residence to rent to a family member (I know! Bad idea!) and I have basically no equity in that one either since I`ve only had it for a year
3) I have no savings or line of credit
4) Based solely on my personal income and debt, I could still qualify for enough mortgage to buy a rental property in the city in which I`m interested, provided I have a downpayment.

Ok. Where do I get the downpayment? How do you guys do this?

Do I hit up family or friends for a loan for the downpayment?

What is a joint venture? Is that how I should proceed?

I`ve been thinking that maybe I should come up with a way to raise the money from a group of friends/family and a repayment schedule instead of getting any mortgage at all. Is that done?

Anyway, I`m just not sure what to do. Any insight would be greatly appreciated!

Thanks.


I may have an investor with down payment but no income to qualify here in Calgary. I can try to hook you two up for a JV. As others say, you play a risky game, but here may be a chance.

Just send me a personal message