Investor · Dallas, TX · Member since 2017 · 18 posts · 7 votes
Hi! I just got preapproved from the lender today for my first rental property! I haven't bought a house since my primary residence in 2007, so this financing part is new to me. It seems like traditional lending is the cheapest way to go long term, at least at the beginning. I am putting 25% down and getting 7.731% 30 year fixed. This is with paying $2000 to buy down the rate. My credit score is 800, if that's relevant. The lender said that you pay an extra 1% for a non primary residence. Can anyone confirm this is true, and is this worth shopping or is this about the going rate at the moment?
Developer · Member since 2020 · 4k+ posts · 4k+ votes
3y
At 7.7% how are your numbers?
Looking at your posts, looks like you just retired and want to build up 3 to 6 rental units per year.
Have you modeled out, say the next 5 years with this plan? Does this meet your financial plans?
Are you going after cash flow or appreciation, or both?
Before you invest I would recommend you attend several REI meetings. Look at all of the various REI investments. Before investing.
You have lots of different REI paths you can take with different risk and reward levels.
Your strengths:
1. Your in Texas
2. Your retired
3. You have lived in your house for 2 years and bought it many years ago. 4. You're ready to do REI.
All of us have different backgrounds and are answering from our perspective and risk/reward analysis. Have someone help you to look at all of the varieties of REI to hit your targets.
Real Estate Agent · Dallas TX · Member since 2019 · 55 posts · 13 votes
3y
@April Hamm, shop around. You've already gotten a lot of responses about lower interest rates available, and you should also really consider an ARM if you'd like a lower rate. Another thing to consider is potentially renting your existing home and buying a primary residence to take advantage of lower rates and even lower down payment amounts. That's what I'm doing. Over time I plan to do this again and again until I've built up a nice little portfolio. It's a slower process for sure but one that allows me keep more money upfront and also add some sweat equity. Hope this helps and good luck!
@April Hamm, shop around. You've already gotten a lot of responses about lower interest rates available, and you should also really consider an ARM if you'd like a lower rate. Another thing to consider is potentially renting your existing home and buying a primary residence to take advantage of lower rates and even lower down payment amounts. That's what I'm doing. Over time I plan to do this again and again until I've built up a nice little portfolio. It's a slower process for sure but one that allows me keep more money upfront and also add some sweat equity. Hope this helps and good luck!
Thanks for the input! I'm definitely starting to shop the rate and so glad I came here to ask! I'm already in touch with a couple of brokers from this chat and have already brought the payment down about 5%! Renting out the current house and moving is unfortunately not an option for me but is such a great idea for most people!