Oppertunities
I have recently come across a few possible opportunities one if a preforclosure and the other is a three unit appartment building. Which leads to a question, if I can find lenders for either or both..how do u pay back a lender on rental property, or can it even be done that way being more of a long term thing. Or do I find a lender for the preforclosure and us the profit from that to obtain the appartment building.
@James Schoen Depends on how you structured the deal. Look up the "BRRRR" strategy on this site. I think that'll help answer your question. Good luck in your investing!
I have not made a deal as of yet...like I said not sure how lenders are with lending for rentals...but thanks I will look into that strategy
I don't understand your question:
how do u pay back a lender on rental property
You get a mortgage just like you would on a residence. You send them monthly payments. I think that must be a trick question :-).
Anything four units or less will qualify for a conventional mortgage. Its a NOO (non owner occupied) vs the OO (owner occupied) loan you would get for a residence. So the rate will be a little higher 0.5-1% higher. When you're first getting started, you will have to qualify for that loan with existing income. The rental income will only be counted by most lenders after you have rental income on two tax returns. You will also need a significant down payment, 20% minimum is pretty typical.
The buy (with hard money), rehab, rent and refi strategy can let you get in with less cash, but is an expensive strategy. You will have high costs for that hard money loan and you will end up with a bigger loan when you refi than if you had purchased up front with a long term mortgage.
If I've totally missed what you're asking please clarify.
I don't think you have missed the question...I just wast sure how likely it is for a private lender or possible partner to lend money on something like a rental which would be longer term to repay verse just flipping a single family property
Originally posted by @James Schoen:
I don't think you have missed the question...I just wast sure how likely it is for a private lender or possible partner to lend money on something like a rental which would be longer term to repay verse just flipping a single family property
I guess I an asking if it is a better strategy to flip a single family property the use the profit from that to buy the appartments