first time financing

[Ryan Washer]

Hello everybody,

This one of my first posts on bigger pockets so bear with me if I am a little off on something. I have been studying for a while now about buy and hold investing and figured if I keep reading about it I am never going to start. So my first step is figuring out what type of financing would be my best bet/ if I am even financially ready. I'm 23 years old with a 750 credit score and about 10k to invest. Would it be prudent to go out and start talking to banks? If so, is their anything I should know before hand?

Thanks!

[Jon Holdman]

Yes. You should know that down payments for investment properties are going to be 20% or more. Maybe 15%, according to some recent posts. Unless you're buying very cheap properties, you may need to accumulate more cash to go the bank loan route. And if you are buying very cheap properties you may fall below the bank's minimum loan size.

As far as qualification, banks will initially ignore the rental income. So you'll need to be able to qualify for the full loan payment with your existing income. Once you have two tax returns showing the rentals you'll be able to use that income, which should help the qualification process a lot.