How to buy a million dollar investment property?

Question

I already purchased my primary residence through the VA. But now, I see an opportunity to buy a turn key rental business. Here's the thing; It's a single family residence in a 5 acre lot, which has other cabins for rent. My question is what kind of loan would I need to purchase this $1,150,000.00 home?
with only 50k in savings.

David Matti · Answer

I appreciate your response, very informative and helpful thank you.

David Matti · Answer

Thank you very much for your response. What about if I’m purchasing it as a primary residence that just so happens to have outbuildings on its 5 acre lot that can be used as air bnbs? Does that change things from a financing perspective?

Justin Hoggatt · Answer

This sounds like a conventional loan.  The broker will likely be putting you in a loan and option that covers a rental property.  That would likely require 20% down for the property ($230,000).  The interest rate would also be higher because it's a rental property so keep that in mind.  Depending on what the property has on it and how it's used, you may also be able to look at an SBA loan option.  They offer better terms and you may need to bring a lower down payment.  The other option would be to see if the sellers would work with you and carry the note.

Colton Hahn · Answer

This kind of situation would almost always be whats called a "jumbo loan" which basically means its above the loan limit of a normal mortgage and changes the rates/the way the bank considers the risk of taking the loan, I do not think you would be able to with just 50k .

One thing to consider is raising the money with other investors to secure the loan, the returns are lowered because you are splitting the pot with them but that would increase the chances of actually acquiring the property. Good luck!