Investor · VA · Member since 2017 · 38 posts · 4 votes
Hi all,
I am greener than green to the real estate investment field. I 've not been this excited about life in a while, buying property as a means to build wealth is an exciting venture. LOOOOOVE this country.
so my question is, when buying an investment property out of state, VA in this case, which is wiser, getting a loan from a bank where I, the investor, reside OR getting a loan locally where the investment property is? I know PNC our bank here also has a branch there....
Hi @Frankie Lotrec - It does not matter where your lender is located. My suggestion would be to call at least 6 or 7 and see what they have to offer. If you're looking to get started the smaller credit unions typically have more flexible terms. I would recommend calling a few that are local to you, local to the property, and maybe some larger ones who can offer you a smaller rate.
Francesca Calabretta It's hard to generalize so I'd recommend you call both. Now, I will say that if it's a commercial property (example: 5+ unit apartments) a lot of the lenders that advertise just don't handle those loans. The local/regional/community bank is usually a better place to go, they keep the loans on their books, etc. At the same time, for a 4-unit in that same region I went with a national mortgage company because the rate was .25% better. So just ask around. Once you've gotten the reams of paperwork together for one lender, it's infinitely easier when you're working with the second, third, etc. because they're all basically looking for the same stuff to send to the underwriter.
I am greener than green to the real estate investment field. I 've not been this excited about life in a while, buying property as a means to build wealth is an exciting venture. LOOOOOVE this country.
so my question is, when buying an investment property out of state, VA in this case, which is wiser, getting a loan from a bank where I, the investor, reside OR getting a loan locally where the investment property is? I know PNC our bank here also has a branch there....
thanks so much
Francesca
Lender will only loan to you if he is licensed in that state. Only thing that matters is that if your lender is licensed in VA. I have a great lender in IL who is licensed in VA. So he knows a thing or two about working with someone who is long distance. Send me a PM if you want info. I can't post it here due to rules.
@Frankie Lotrec Another option is to go through a broker and have them do all the work for you so you don't waste a lot of time contacting direct lenders. Since PNC is in VA then you should talk with them first. If you want a second opinion after they give you terms then don't hesitate to reach out. Thanks..
To answer your question directly, it's all going to depend on how organized you are, how hands on you want to be with your investment property and your level of confidence in your management company if the property is out of state.
Regarding getting a loan from out of state, it depends on the type of loan you're going for. If you're looking for a bank loan, I would go to a local bank and exhaust all avenues of local lending prior to going to a larger company that handles out of state lending. It will be less expensive going conventional than implementing commercial funding from out of state vendors.
@Frankie Lotrec - A local lender will probably be better just because they will know your market a lot better. I'm sure there are plenty of lenders that you can choose from.
If you know of a lender closer to where you are living now, get a quote from them too. It certainly doesn't hurt.
I would go with the lender that seems the nicest to work with and has the cheapest rates.