Turnkey New Construction Homes

minimum down mortgage no payment that’s too big.

Here is a great new construction opportunity for investor landlords. We will need about $6000+ out of pocket.  We do not need 10% down payment like so many other programs out there for investors. We do not need mortgage insurance to be paid. This property will cash flow.  The property will be new construction and you will get a 3 year signed lease by a rent to own buyer with monies equivalent to about 2x rent.

Investors will need a 720+ credit score, with low debt to income ratio, and some reserves in the bank or saved somewhere. I think that investors will agree that this $6000+ is a very low amount for an investor these days.  New construction and tenants waiting in line really make for an easy situation for the landlord.

Many hours have been spent to find the best programs for investor clients.  New construction in Oak Grove on the Ponds Golf Course. Qualified tenant families waiting in line to do a three year lease.  A builder is lined up to build these rambler floor plan houses.  Floor plans can be emailed upon request.  There are lots that back up to the golf course and woods on a cul-de-sac.  77-hole course, with a driving range and a 40 acre park. Surrounded by a soccer field and trails to Lake George.

1. The investor will come to closing with around $5300 to pay for closing costs.  The tenant family will pay the investor around $3600.  Most investment properties the investor needs 10-20% in this real estate market, so this is a great opportunity for $6000 or less.

2. The full walk-out lot is being bought directly from the bank at a discount under foreclosure.

3. The home has 3bedrooms and 2 bathrooms and is 1450 finished square feet.

4. The acquisition cost of the home is around $256,000.  This includes closing costs.  Rent is sent at $1800 per month with an automatic increase equal to the actual property tax increase from 2009 to 2010.  Also included is the $3600 down from the tenant buyer.

5. The fully amortized loan option provides break even or positive cash flow and there is a good chance that interest only option will be available.

All of our other standard features are included:

> Stainless steel appliances, including microwave
> Custom hardwood floors in kitchen and dining room
> Concrete driveway
> Cultured stone instead of brick
> Central air conditioning
> Washer and dryer for laundry room
> Full yard of sod and sprinkler system

The following is an example package for an investor today on what they can buy for new construction. Let’s go over some of the qualifying aspects needed for today’s investor:

Instant Equity Available- This typically means that’s their will be some instant equity based on today’s real estate market value, typically 15-20%.

$75,000+ F.T. family income- Based on qualifying for a loan these days, you would need a full time family income of $75,000 if it was going to be an investment property.

700+ Credit Score- One to two years ago we could have done this with a 620-660 credit score, but today lenders require a pretty high credit score.

$25,000+ min. down payment- This is really only about a 10% down payment, the 100% financing no money down days are gone for now, so money is needed.

(10% Line of credit, ask how)- We have large banks like Wells Fargo, etc and can show you how to get a credit line from these banks based on credit and salary.

NO Bankruptcy last 24 mo+ -This particular investment program we have to ask that their were no bankruptcies in the last 24 months, if you have a lot of money down, we may be able to find another lender, possibly, but this is pre-construction and we have a specific lender and need to meet their requirements.
NO Foreclosures last 36 mo+- At this time we need to ask that your most recent foreclosure was over 3 years ago. A short sale may be looked at the same by some lenders.
Same job/type 24 months It really helps if you have been doing the same “type” of job for the past 2+ years, not always the same company, just same line of work.

Now let’s go over some of the features this property program has, and how it works:

Features:
-Turnkey New Construction- This means it’s ready to go from day 1, we give you the key and you are all set with a rent to own buyer.

-Special Pre-Construction pricing allows for Instant Equity- Because you are doing a pre-construction loan, we can save money on holding costs and pass that savings on to you.

-Special financing program allows for NO mortgage insurance even with 10% down payment-This saves you on cashflow.

-Already rented with a 2-3 year lease and a rent to own agreement in place before construction begins-This is very HUGE for you

-Property will cash flow- To be even break even or cashflow on New Construction with only 10% down is really unheard of.

-Many down payment alternatives available- The Line of Credit we mentioned above

-Down payments also allowed from having equity in a property, ask for details-If you have over about 15-20% equity in a property right now we may have alternatives to using a lien on that property in exchange for a down payment on your investment property.

-Many NW cities to choose from- We have many cities to choose from, we have the lots, and you just choose the city.

Investor Program:
We design the home around the tenant family’s needs and allow them to be involved in the material selection process. We meet with the tenants first to design a win-win scenario for everyone. This will create an emotional attachment to the home for that rent to own family. Typically, in this situation, families will take better care of the property and you will have the best chance possible for the tenant to buy the property during the rent to own lease term. Once we have the house designed and the numbers defined, we would present you, as the investor, with the opportunity.

Now let’s go over some actual details of the houses themselves:

Features for the home to make it turn-key:
- 4BR/3BA two-story and 3BR/2BA split-entry homes
- Stainless steel appliances including microwave
- Custom oak hardwood floors in kitchen and dining room
- Cultured stone on front instead of brick
- Concrete driveway
- 3 car garage with opener
- Sprinkler system, full yard of sod, and landscaping
- Air conditioning
- Clothes washer and drying

Price points may vary depending on the type of home, and if you are reading this after May of 2008, this is subject to price changes, so please call ahead first. Once you are locked in on a loan though and have a purchase agreement you are locked in at that price with the instant equity.

Approximately $240,000 for a split-level
Approximately $260,000 for a rambler
Approximately $270,000 for a 2 story

Photo 1 Here is an example of 1 photo, I have more I can show you on this property.

What is good about this example from above, is it’s based on a builder who has been building for many years. The property has more upgrades than the average new construction house. The house is at a lower price to make the numbers work. The house also has a rent to own buyer already in place, which really saves you a lot of money on finding a buyer later on. My associates that I work with on this new construction program have been working with these builders and programs for years and if you would like some help please email me anytime at ron@minnesotainvestors.com agent/broker

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New Construction Twin Cities: New Construction Inventory

2 story, 4bedroom, 3bath houses available in Rogers at a nice discount. 2000 sq ft above ground, 1000 sq ft unfinished in the lower level. These are nice with a fireplace and hardwood floors. There are many in the neighborhood like them. Comps in the $460,000 range. There are only 6 left and we expect them to be sold in the next 30-45 days. All built and ready to see. Not listed, non MLS.
Also some 4bedroom, 1.5 bath 2 story townhouses in Greenfield with appraisals done at $258,000 already. We can offer some great discounts on these properties if you are qualified. Some of these are already renting. These are brand new with over 1600+ sq ft. Their are only about 5 left, we expect them to be sold within the next 15-30 days. All built and ready to see. Not listed, non MLS.

There are about 4 Otsego single family houses left. In the price range of $319,000 to $329,900. These are 2 story’s , four level splits, and have 3 to 4 bedrooms. Approximately 1500-1800 sq ft. These are brand new. Otsego is near Rogers in a growing area. We have lockbox codes, and sold comps, and these are built and ready to see. Not listed, non MLS.

We have a property near Cedar Lake TWP and Webster, 1.5million appraisal, if you qualify, we will offer you a fabulous discount. Please contact us if you are serious. You probably need 700+ credit score, maybe 15-25% down payment.

Please contact me ron@minnesotainvestors.com and we’ll help you find a property.

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New Construction Twin Cities: Current Houses Available

Many buyers come to me and ask where they can get their next good deal on a new house. Before I give you some examples, I would like to talk about what it will take to qualify for these deals. Qualifying has changed a lot in the last 6 months.

Right now as an investor trying to get a loan you will most likely need 10% down payment with any loan you try to get. Also you will most likely need about a 680 credit score, and a pretty clean credit report. There are a few different lenders still allowing for Investment loans, which are also referred to as Non Owner Occupied loans. You could get these loans for as little as zero down just over 12 months ago, the market has changed. The interest rates have also gone up a lot for these loans due to the lenders risk and the amount of defaults. At the time of this writing a jumbo loan is any amount over $417,000. What that means to the buyer is that you will pay an additional premium(higher interest rate) if your loan amount exceeds the $417,000.

Another interesting thing that has changed is that we use to do what was called a piggy back loan. The reason these loans were available was to eliminate PMI (Private Mortgage Insurance) Often the same lender, or another lender would provide for a 10% or 20% 2nd mortgage on a property. These were often abbreviated as 80/20 or 80/10/10 loans meaning the remaining 10% was put as a down payment. PMI is private mortgage insurance to protect the lender in the case of a loss on default of the loan. PMI applies to loans with less than 20% down, Also referred to as Insured Conventional. Due to the amount of defaults, 2nd mortgage interest rates have really increased a lot. As of the time of this writing 2nd mortgages are even becoming very rare on Non Owner Occupied loans.

The reason 2nd Mortgages are becoming more rare is due to the large amount of default on Non Owner Occupied loans specifically, as stated earlier. Those with 2nd mortgages (2nd position) receive monies after superior lien positions in the case of a foreclosure. Superior lien positions would be a 1st mortgage, and or unpaid taxes (government liens). Often their isn’t anything remaining left over after a foreclosure, that’s why 2nd mortgage companies need to charge so much.

Getting back to deals and New Construction, we have New Construction available to those with 680+ credit scores and 10% down payment at an amazing discount of 25%. You will need to pay 2-3% buyer closing costs out of that. We can’t promise these discounts will last forever, but they are available for now. At the time of this writing we have some properties brand new available in Rogers, Otsego, and Greenfield. Join my next blog post to find out a little more about each of the properties.

Please contact me ron@minnesotainvestors.com and we’ll help you find a property.

Thanks,

Ron Jr.

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