Is this a viable business plan to secure me real estate?

Question

I'm asking here if this is a viable/likely option for me. To put it shortly, I don't make enough money to put a down payment on any house. I am looking for a silent investor who is willing to agree to a contract with me whereas:

1.They put the down payment and co-sign the mortgage/etc. and do the paperwork/income proof/etc. This will make them half owner and this will be part of the following addendum;

2.They agree in contract that I live in the property and they are not reside there/use it/etc.;

3.I pay them the mortgage plus interest on the down payment they gave me. When I match the down payment they gave + interest, they get their money back with profit and I become full owner and solely responsible there on out.

I think this is the only way I can get my own place. Should I default on any payment, they become full owner and I lose the property, leaving them to either pay for it themselves or let it go.

This is a good idea for a self-employed person who cannot provide taxes or collateral?

I cannot save money because I need to get my own place now, so that's not an option.

No mortgage lender will approve no taxes + self-employment + no collateral, but a silent investor...?

What are the thoughts on this business plan to help me secure my first house in a time of need?

Answer 1

It's viable for you, but the "investor" is either stupid or willing and able to write off the investment as a gift for a friend in need, knowing it will probably end the friendship.

The banks make their money off of indebtedness, with the highest returns being on the highest risk loans . If the bank isn't willing to give you that debt on your own, it's because they already know it's a bad debt.

In this case, trust the banks. If you can't come up with the downpayment on your own, you won't be able to meet your other commitments on this contract.

Answer 2

If you're in the US, you have some no down payment options, but you still need some closing costs money, that can potentially be negotiated with the seller. There are fha loans which have very low down payment options, 80/20 loans which are 100% coverage, hud assistance on fha to get a 100% loan. Your 401k can be leveraged into the loan as 35% collateral paying 7% interest on a traditional no recourse loan.

These options are available with a work history and if you're not taking on more debt than you can pay with 30% salary.

Finding an angel investor will be harder than working with the bank, they have much less room for risk. It's easier to find a current landlord and asking about a rent to own, though, this will be more expensive than a mortgage.

To be honest though, most people are in a rush to be house poor, living on the edge of affordability. I don't know your situation, but I do know that rushing into things can be very expensive in the long run.