Getting First Rental Property? Financing it? Alone or Group?

Question

I would like to get my first rental property. I'm not rich. The income will probably be 150 to me after paying rent and property managers. I want something new and I have tout 20% down. What is the best way to get financed besides a bank? Would anyone suggest doing it alone or in a group? I honestly do not want to deal with a mortgage but know I will have to if I do it alone since in my world, it is extremely hard to come up with 130,000 cash. Any suggestions?

Hattie Dizmond · Answer

Tony...find another lender.  Talk to small, local banks & credit unions.  Big banks & high-volume originators are notorious for acting like their policies are the same as regulations that apply to all lenders.  Not true.  Just find someone who will work with you.

Tony Fowler · Answer

Thanks Hattie,

Will  do. On Zillow right now. My desired area is no longer on sale. :-( Thanks for the advice. I recently tried to get a loan through Quicken. That was a horrible idea

Tony Fowler · Answer

To Hattie - The bank didn't offer me an FHA loan. The problem with that is I am in Presidio and the  house I want is in San Antonio. They said I have to get a Conventional and pay 20% down. The builder said that I needed 25% down for them. The house I was looking at was about 138,000. I believe the not would have been a little over 950 and the property managers said I would only get about 1,050 a month rent in the area. Minus their cut and mortgage of course, I would have no income. Also, we have a current situation where we are living with someone where we are and the bank didn't understand the fact that I had no rental history and they didn't like that so with that being said...

To Elizabeth - I wanted to work with a bank but the rental history thing got in the way. Haven't had to pay rent in about 3 years so they treated me like I was lying about the situation or something. It's all so confusing to me. I was trying to make enough in the stock market so I would be able to just pay cash but then ISIS and Russia happened so I don't see that happening for a long while. Will probably be too late by that point

Elizabeth Colegrove · Answer

Why don't you want to do it with a bank? Personally I love banks. They are 30 year loans from an impersonal institution who has really low historical rates. Personally I love them!

If you are going to live in the home than you can get a 3.5% FHA or my favorite 5% conventional loan. We got started at 23 and 25 at the very beginning of our career. Just getting started with low financial backing. So I understand where you are coming from and talk about what we about "our" tricks and solutions found in my website. We have low "margins" but have still done very well.

Hattie Dizmond · Answer

Personally, I would go with an FHA loan.  You should be able to get into a property with no occupancy requirement for 5% down.  After closing costs, and keeping some for reserves, you can put a tenant in that property and be positioned to acquire another property.

What would be your market rent on a $130k property down in Presidio?

Getting First Rental Property? Financing it? Alone or Group?

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