Rental Property Investor · NV · Member since 2014 · 241 posts · 85 votes
I know the general rules here but want to see if anyone can point me in the right direction. Here are the basics of what I'm looking for and my situation.
Foreclosure 3 years ago, now I own my primary home free and clear. I am looking to purchase an investment property in the fairly low end range of 65-80k with 20% down. What are your thoughts when it comes to finance options? Help me get this deal done.
Investor · Dallas, TX · Member since 2014 · 2k+ posts · 1k+ votes
12y
FHA is a 3-year wait. Fannie/Freddie both have a 7-year wait. There are excepts to both.
Conventional, non-federally insured loans, can vary dramatically and are governed by the lender's own underwriting guidelines.
As with most things in lending, you will likely have more flexibility and leeway with smaller, local, portfolio lenders. The big banks and high-volume originators are still stinging from the sub-prime crisis. Plus, since they sell loan derivatives, they have to grade loans and adhere to much stricter underwriting guidelines.
If you have a strong enough deal, and are willing to put a substantial down payment on the deal, you shouldn't have a problem. I will say, you shouldn't be surprised if you are asked to put up to 30% down, so that you keep your LTV at 70% or less. You should also be prepared to pay a higher interest rate. The good news is that once you have a track record of properly servicing these loans with a smaller bank, you should be able to get the same or better terms as anyone else.
Rental Property Investor · NV · Member since 2014 · 241 posts · 85 votes
12y
Thanks so much for the reply Hattie. It sure is nice to have a community that will take the time to help other like minded people. I really do appreciate it.
Residential Real Estate Broker · Riverside, CA · Member since 2014 · 82 posts · 121 votes
11y
It depends on where you are, I would learn the process of doing no money down deals so you can preserve your funds for fix up when you need it. Also, you want to have the funds available to pay cash when the really good deals show up, like buying a property for 40 cents on the dollar. If you are operating with cash, you have an advantage over a lot of people.