Not everybody is ready to talk to Fred Shatzoff, a veteran of the New Jersey real estate lending industry since 1989.
“If you tell me you have $75,000 and I look at your bank statement and you only have $10,000 … well, where is the other $65,000?” Shatzoff said. “‘Well, I can get it.’ Okay, who are you going to get it from? Are you going to go to the bank? Are you going to rob the bank? Because if you’re going to rob the bank, we’re not gonna do the loan, because you’re gonna be in jail and foreclose the loan.”
Instead, Shatzoff recommends doing some wholesale deals or teaming up with a capital partner on some fix-and-flip deals to build up your stash of cash. With enough money for a 20% down payment, combined with a credit score of at least 640, it becomes surprisingly easy to get approved for a loan.
Of course, there’s another way to go — start with your personal residence. Shatzoff came up in the mortgage industry by brokering primary-residence home loans underwritten by the Fair Housing Administration (FHA) and the Department of Veterans Affairs (VA).
With an FHA loan, you can put as little as 3.5% down and get approved with a credit score as low as 580.
For current or former military personnel and their families, VA loans can be even more interesting. VA loans are eligible for 0% down.
Yes, you have to live in those properties … but not forever. You must move into the house within 60 days of the loan funding … but you only need to live there twelve months. After that, you can move out, rent it out, and buy your next personal residence … possibly with another FHA or VA loan!
“The goal for financial freedom for someone is to have enough rental or enough residual income,” Shatzoff said, “so that if you don’t feel like getting up to work that particular day, you have enough income coming in to cover your bills.”
