Me and a friend (50/50 partner) are going to the bank next week to attempt to secure financing for our first deal. One thing I want to do is make up a "packet" with pictures of the property and the vital numbers. What are some other tips/tricks to help us prepare for our first attempt at financing!?
Have 2 years of W2's and tax returns ready and available along with 2 most recent paystubs. Not sure what kind of "deal" you're looking at, but all banks will want this info. If this is your first deal, the bank will probably be more interested in both of your financials than the property itself. They require an appraiser to determine the value of the property, so for the most part a fancy packet won't matter much.
If your first property is a larger commercial buy-and-hold, having a packet including pro-forma and personal experience would be helpful.
Can you elaborate on the kind of property and what type of bank/loan you're looking for?
My wife's cousin rehabbed a small 2/1 and kept it as a rental. He is moving out of state and let me know he was looking to offload it. Essentially he is holding it off the market for a few weeks if I want it - if I don't he will list with a realtor.
We expect the purchase price to end up around $45k. He has rented it for around 5 years steadily at $600 per month. Besides mortgage/insurance, he pays just one of the small utilities. Tenants are responsible for all the rest including lawn care, etc.
It's not a knockout - but I'm hoping it is a nice start. If we can cash flow $100-$150 a month and get a reserve fund set up, it should start us down the right path.
You could consider including a personal financial statement as well. Especially if you have any assets, savings, etc. (there are all sorts of forms online that you can download and edit- just remove the sections that don't apply to you)
If you have strong w2 income this isn't so much of an issue probably. And if your financial situation is really weak it might hurt more than it helps. But for me as a self-employed person it helps; my income is low but my assets are pretty high in relation to that.
Jean Bolger, 33 Zen Lane | http://www.solidrealestateadvice.com
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