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What is the best the way to start buying in vestment property if you don't have the money , credit, and you have not been on your job for a long time.

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Jynette,

I have a duplex that I bought in 2002, and my primary residence I bought in 2009. When I bought the duplex I paid roughly $3800 in closing costs. I am a veteran so I have the benefit of not paying PMI. I spoke with a bank a few weeks ago about their current requirements for investment properties.

The bank informed me that the underwriters like to see a minimum of a 1.2:1 loan to down payment ratio. Prior to the collapse I knew people who were able to get financing on investment properties with zero down, zero closing (none-none as brokers call it.) Unfortunately that type of borrowing, coupled with unsophisticated borrowers led to an unstable market. (I'm oversimplifying for length.)

My outside-the-box suggestion would be to find investors, maybe a few friend, who can pool together enough to make a down payment. Form an llc, draft a corporate charter, and work it that way. Later, once equity has been established in the property, you could sell your equity in the property to and buy one of your own, or your group could continue buying more properties.

I'm no expert by any means, I just wanted to offer advice from my experience.

-Chad

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Thanks you! Can you  help me  fine a investor or maybe you can network together , not right now,  maybe we have to get to know each other first let's talk. and if there any one out there who aybe interesting in started a network group for investing in property in New Orleans please get back in toouch with me. Thanks for your help keep in touch.

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In looking at first-time investment properties, you're going to want to find something that is a little run down (ie. not sellable as-is, but also not a repair sink-hole).  One to three months should be the range of time it should take to complete the repairs...if it is outside of that, you're probably looking at a property that will not be good for you to invest in right now. 

As far as the financial side, Chad has a great point.  Since the asset-backed securities meltdown, banks have been extremely conservative with lending.  For you this means that without credit (even if you had a 20% downpayment) the likelihood of getting a loan approved with a new job (under 2 years) is not very high whatsoever.  If you get a group of investors together, there will be a lot more money available to pay for a property, and more credit scores on the application to mask your own if applying for a loan.  Since it would be hard for you to get investors that don't know you as a person or are in another state, I would advise getting a group of neighbors, friends or church members together to form an "investment club".  From there, you all can host fundraisers, pool resources, strategize, research and finally buy together.  

Finally, it might also be beneficial for you all to network at least one general contractor into your investment group.  Not only will they be able to give accurate estimates on repairs, but if given a share, they will probably do work at a greatly discounted price or at cost.  Just remember, add 20% time and cost to whatever you all end up budgeting for repairs.

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Another approach is to find a job with a real estate management company so that you can learn the ropes and build a fantastic reputation.  A lot of money is given to people through a social-business network.  It may take a few extra years, but the rewards can be much greater.

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Could it be possible that you could find owner financing? There are a lot of investors who are unable to sell their property in todays market. Some may be willing to finance their property, if you repair it yourself. However, I would consult a real estate attorney, before entering into an owner finance contract.

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Jynette, well I would start by doing lots of reading and a local community college course in Real Estate if you think its an industry you want to be involved with or just purchasing property. You want to have as much knowlege as you can. Its actaully better for you if you are not licensed as an agent since there is no disclosure to your knowledge of the industry. I would then play the numbers game. Try offering 10% more for the property in a lease option with owner financing with a refinance in 5 years. This will give you time to build up the down payment for the purchase. Also offer a 20% equity share on any apprecaition of the property within that time. Just be creative in your efforts and see where it goes. With each no you learn something and get the negociating experience that will help you in the future. You will eventually find a yes.

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