Financing options with low to no income?

Question

Hey BP,

If you have the ability to put together enough capital for a 20-25% down payment without a current source of taxable income for a rent property, what options are there for financing?

Thanks!

Caleb Jordan · Answer

There are some HML that can lend on a vacant property. They may want you to either have landlord experience or have contract with property management company though.

Tim Johnson · Answer

I'm a general contractor and also a loan officer, and LOC is about your only option.  I use my LOC all the time for deals,  its awesome.  I have 95% rehab funds availabe for repairs and 80% purchase value I have on my LOC.

Alex D. · Answer

@Jason DiClemente,

Interesting. So that would ultimately restrict my search to investors selling off rental properties? Appreciate the info and time Jason!

- Alex

Alex D. · Answer

@Jason DiClemente

Sorry, forgot the "@" to include you in my response.

Alex D. · Answer

@Laura Williams,

Thanks for the advice! I will start looking into finding a solid commercial loan connection.

Laura Williams · Answer

@Alex D. you would want to look at commercial loans and the qualifications of those loans vary depending on the bank.   I'm doing a commercial loan right now 75% LVT and this bank didn't even want to see my tax returns. Only thing is the rate is higher than traditional for commercial loans.  I got 6.2% with 2 points for 30 year fixed. Some commercial loans are ARMS or balloon payments etc. A traditional Fannie or Freddie would be about 1 percentage less but they also want a financial proctology exam.

Alex D. · Answer

Jason,

Thanks for the reply! When creating a detailed proposal for a property, what are the primary elements that a lender would like to see? I assume much of the data that the BP calculators put out but is there anything else that would be critical to include? Again, I appreciate your time!

- Alex