Can You Buy Rentals with Terrible Credit? (90% CLTV Explained)

Michael Zuber (0:00)

All righty, folks, do you have horrible credit? Maybe just some short-term life events, divorce, hospital bills, whatnot.

Have you found an opportunity to buy a apartment or real estate investment, and you just don't have more than 10% and you think you are stuck?

Well, guess what? The folks at Velocity offer a fast 50 program. And of course, we can't forget their 90% CLTV loan. So again, if you have bad credit, you only have 10% down, and you want to get a deal done, congratulations. We're going to talk about it. How are you doing, Stephen? Let's do that marketed thing real quick, and then we'll get into the fast 50

Stephen (0:36)

Yes, thank you so much again for remembering. Although I work very happily for Velocity mortgage capital, all the ideas and topics discussed on this channel, that of my own. So basically, I think some people might have an assumption that even with credit challenges that are sometimes temporary life events, you just went through a divorce, you know, I don't want to put out the bad mojo, but you know, spotting a die, breadwinner, you know, all that stuff to where getting financing is very, very difficult.

We provide a particular product where not only are we more leaning on the credit qualifying, but also income qualifying, but also on top of that, we allow for secondary financing as well. So again, going through temporary credit challenges and maybe, you know, you don't want to give up all your reserves, and you're looking at maybe about 10% down. If you find the right motivated seller that doesn't need all the proceeds from the sale of the property, and it's willing to carry, like, you know, in this case, up to a 40% second, and then maybe even having the seller credit them towards their, you know, closing cost, but maybe buy down the rate further, I've seen it. And again, doing the homework and finding the right motivated seller in the right situation, people walking into, you know, great deals. I've had several this week on that 90% CLTD. Unfortunately, it wasn't through any of the, you know, or at listeners, but it's getting much more popular. Just, I think most sellers just aren't aware of this situation or this option.

Michael Zuber (2:03)

Yeah, I think there's a couple of things I want to hit here. One, let's get this one out of the way. If you are a real estate agent and you have a listing and it's tired, it's 90, it's 100 days, and you're doing your job and you know your seller's got equity, I promise you, if you have a conversation with them about potentially selling, have seller financing either as a first or a second, your inbox is going to explode with offers. So again, if you don't know what we're talking about, reach out to Stephen, he'll tell you about the 50, 40, 10 Again, real estate agents, please, I just did a stat this morning, 84% of you have closed zero transactions.

A listing is not a transaction. You don't get paid until it closed. So if you have a tired listing, real estate agents, wake up, do your job. And if your seller's got equity, at least talk about seller financing. Stephen can help you. Second, buyers.

We are in a buyer's market in a lot of the country. I just did an interview with somebody buying apartment or multifamily deals in Houston for 50% off. I am convinced there are people that will buy apartment buildings with 10% down. Maybe they'll even house hack them. They'll be Arnold Schwarzenegger. Arnold Schwarzenegger was a millionaire before he was a famous actor because he bought a sixplex in some place in SoCal.

So folks, getting wealthy is really simple. Find a motivated seller, negotiate financing where you can cash flow day one. If you want to live there, great. And if you have dogshit credit, 50, 40, 10, fast 50, velocity can help with you. You're not defeated just because you have bad credit in the moment. Right.

Stephen (3:49)

Again, people's normal assumption, because again, you're supposed to have good credit to get a loan, right? And that makes total sense. So but for us, we can find the value in certain transactions, you know what I mean? Given the certain limitations or resources available to that borrower. So in this case, if you're kind of credit challenged, but the seller is willing to kind of make up the gap, we're willing to kind of work with that situation to kind of make it happen. So again, I'm seeing a lot more of these potential options coming up, but I just wanted to kind of have that conversation because from your video with that other gentleman the other day, and he was talking about getting discounts. I mean, before some of these sellers have to give such a huge discount, maybe this is a better angle, right?