Nov 3 • Auction Fundamentals
Loan Programs You Can Use to Buy Auction Properties💰
Happy Monday!
🎯 Today we’re diving into one of the most important topics for new investors — how to actually finance auction properties.
A lot of people assume you need to buy auction properties in all cash, but that’s not true. There are several investor-friendly loan programs that can help you get started — even if you’re a first-time buyer.
Here’s a quick breakdown 👇
🛠️ 1️⃣ Fix & Flip Loans
Best for: Distressed or run-down properties that need renovations before resale or refinancing.
💡 Why investors love it:
- Great for properties that wouldn’t qualify for conventional financing due to condition.
- Lenders typically fund 100% of your renovation costs.
- You can often start with $0 down, though you’ll pay slightly higher closing costs.
🔧 Pro Tip: These are short-term loans (usually 6–12 months), so make sure your timeline to rehab and sell is realistic.
🏠 2️⃣ DSCR Loans (Debt Service Coverage Ratio)
Best for: Turn-key or rent-ready properties that can pass inspection and generate immediate income.
💡 Why investors love it:
- Only 15% down (some go as low as 10–20%)
- Qualifies based on the property’s income, not your W-2 or tax returns
- 30-year fixed rate — no refinancing needed if you plan to hold long term
- Lower closing costs compared to fix & flip loans
⚠️ Heads up: If you plan to flip the property quickly, watch for prepayment penalties (PPP). These are common on DSCR loans, so always read your loan terms.
🏡 3️⃣ Conventional, FHA, VA, or USDA Loans
Best for: Owner-occupied or move-in ready properties that meet lending standards.
💡 Why investors love it:
- Lower interest rates and down payments (as little as 3.5% for FHA)
- Great for house hacking or living in one unit and renting the rest
- Available through many traditional lenders
⚠️ The catch: Not all auction properties qualify. You’ll need to find auctions that allow these loan types — typically bank-owned (REO) or HUD auctions, where the property condition meets lender requirements.
🔑 The Bottom Line
You don’t need all cash to start investing in auction properties.With the right loan program, you can:✅ Finance your purchase✅ Cover your rehab✅ Build your portfolio — even as a beginner
🚀 Ready to Finance Your First Investment?
Drop a 💬 “I’m ready!” in the comments and let’s chat!I’ll help you figure out which loan type fits your goals and how to get started.
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Loan Programs You Can Use to Buy Auction Properties💰
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