I'm a first time investor that has found his first property.
I have been browsing trulia, realtor, and zillow for a few weeks. I found a property I like. I connected with a realtor from Keller Williams Realty. He said banks can be hard to work with (and can take awhile) and recommended and connected me with a lender. The lender will call me tonight and after being pre-approved I plan to find a house with this realtor.
Am I missing anything? Should I be careful in trusting both the realtor and his suggested lender off the bat?
This is my first home and first real estate investment. I dont have money to lose and I just want to make sure I'm doing things right.
Are there any other steps I should take to make sure this investment goes as planned?
Thanks in advance,
The lender is definitely giving some kind of commission or "referral fee" to the realtor for sure. But that shouldn't automatically sound an alarm. I would suggest at least listening to their rates and plan.
If you don't mind me asking, please provide more information on the property you are interested in, purchase price, are you wholesaling? flipping? etc... I worked for a hard money lender for a while, so I know the lending industry a bit. Add me, I'll help out in anyway you need.
The property is a SFR with a mother-in-law basement. It is listed at $180,000 and I plan on living in the basement while renting the main part for around $900 - $1000. It's in Provo, Utah. The prices are pretty high here for any investment property. I won't be making a positive cash flow while living there but I'll be paying a lot less than I would if I were renting from someone else. I'll be financing it with an FHA loan, as I don't have much money saved up. I hope that helps.
sounds like a good plan to me..
you can always shop around to various lenders.
@Account Closed is probably not correct in his assumption that there is a referral fee in there. That would be a violation of the Real Estate Settlement Procedures Act (RESPA) and they could both get fined and lose their licenses.
The primary reason a real estate agent recommends a specific lender is because they have a good track record with them. Real estate agents want to close deals and don't want loan problems holding up their commission checks. This is why they refer to lenders they know, trust and have good communication with.
When shopping for loans, you should check with a mortgage broker who can originate loans from several different sources, directly with a bank (certain banks like Key and regional banks have very different product offerings than most brokers), and a local credit union. Have your credit pulled in a tight time frame and you will only get one inquiry ding. http://www.consumerfinance.gov/askcfpb/763/can-shopping-loan-have-effect-my-credit.html
Thanks @William Hochstedler . I didn't know it was a possibility to have a mortgage broker do that until you told me. I'll do that.
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