Im looking at buying my first investment property and trying to figure out best way to get in with limited cash. I have a primary home but its not currently an option to rent it out and finance a new property under FHA. The property is too close to be a second home as well. Any suggestions on how to get into the investment/ rental market with little down. Credit score is not an issue and little to no debt on the books. Im in the Arizona market
@Jonathan Hughes i would just save up more money until you can afford another 20% down loan. Just incase there is a market correction in the near future you want to be able to buy a property right and not be over leveraged
If you have enough equity in your primary home, a HELOC is always an option. Many investors get started that way!
@Account Closed That is an option that has come up today as I have been talking with people. My main question with a HELOC is how does that work with the lender for the investment property. Will they want to see the 20% down in my bank account for a few months before the loan process starts or are they usually ok with knowing its coming from the HELOC? And I have about 40-45K equity in my current home which I don't really want to refinance as its at a competitive rate.
I use Chemical Bank and they just have me send them my HELOC statement that shows the available balance. Then a couple of weeks before closing they'll have me put the liquid funds into my account and prove that they're there. I'd just talk to your lender and find out how they work that since I suppose they could all do it differently.
@Account Closed Thanks for the info and ill be looking into it.
@Jonathan Hughes I invest a lot in Arizona. You say you want to get started with your first property. Are you looking to do a flip or are you looking to do a buy and hold?
In order to be competitive, you may want to use hard money lenders so you can make cash offers and then refinance the property once you get it. Also, you may want to find the property though a wholesaler so that you can buy into equity.
We should meet up some time and I can show you what I am talking about and maybe introduce you to some of my contractors and other members of my team. Send me a PM if you would like to meet up.