First Pre-Approval Success!

5 Replies

In case you didn't read my introduction post, I was meeting with my mortgage lender this week to see how much I could get pre-approved for. I was nervous because of my high student loan debt that runs me about $1,100/month.  

However!  I met with the lender and found out I am pre-approved for up to $550,000 for a 3plex and would be even more for a 4plex!  I also qualify for a lot of first home buyer loans that only require as little as 3% down!  I am excited to start the investment chapter in my life

I am going to be owner occupying the multi family, so now I just need to find the right deal!  I am hoping I can lean on this forum to analyze a few deals that might come up and also where to find property.  

I have been doing pretty well at looking around on the internet sites, but does anyone know anywhere else I should look?  Has anyone had any success in going to a bank to see whats in their portfolio as far as house foreclosures?  I have a buddy that works for a bank who has already let me know he would be interested in trying to work some deal. 

Thanks!

Getting pre-approved is the first step.  I would ask your lender who they recommend as an investor-focused real estate agent.  I would interview 2 or 3 agents and pick the one that feels the most comfortable.

Even though you know how much the bank will lend to you, you need to run the numbers yourself and see what you are comfortable with financially.

Congrats - one thing to keep in the back of your mind when buying multi-family with little money down in expensive cities, are the conforming loan limits - or the maximum loan a lender can give you and it still be considered a conventional mortgage. I'm not sure what the limits are in the areas you're looking in Massachusetts, or what the property values you're looking at are, but perhaps something to talk about with your lender!

As an example - in Chicago, IL (Cook County) they're as follows:

1 unit $365,700

2 unit $468,150

3 unit $565,900

4 unit $703,250

This is helpful as you can automatically weed out properties based on the loan limits if you don't have a lot of capital to put down.

As far as looking for properties - keep doing your research, but I'd suggest connecting with a real estate agent... and be picky with you who select. You'll want to find someone who knows the area, knows and understands real estate investing, is knowledgeable about your target market, understands what you're looking for, and who will be patient with you as you look to acquire your first property - so be upfront and honest with what your expectations are from the agent. A good agent will be able to send you daily feeds of new properties on the market for you to sift through, can pull comparable sales ("comps") to give you an understanding of how the asking price compares to what's actually sold, and to give you a perspective of how the market has been doing over the past 12 or so months. Additionally, the agent should be able to provide you info as to what rental rates in the area around your future purchase are, how long properties have taken to be rented, among many other things - Let's not forget an agent will also take care of things like scheduling visits to properties you want to see.

Best of luck!

Dan

@Jesse T. and @Dan C.

Thanks for the info!

My dad's girlfriend has actually offered to be my real estate and give me here commission (sort of as a house warming gift) so I was thinking about doing that.  There is also a real estate agent that my mortgage lender works with on a daily basis for years and years that comes highly recommended.  I need to just start using their resources.

@Nick Noon congrats on the pre-approval. 

All you need to do is start looking!

Congrats @Nick Noon ! great first step, with that kind of money you have the ability to turn a good profit. I have some ideas for you for a good starter property at a great price. Some MLS, some off market, and some foreclosures at great price points. Shoot me a message to specify what you are looking for.

[email protected]

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Join the Largest Real Estate Investing Community

Basic membership is free, forever.