How hard is it to get financing on SFR rental property
Good Evening everyone!
I am looking for some advice/opinions on a build I am about to do, and greatly value any input from those of you with more knowledge on the subject than I!
I typically buy and sell property to make a quick profit, but have recently been valuing/considering long term income properties in the form of single family homes to obtain passive income.
I recently went under contract for a lot with intentions of building a small house with cash to resell for profit. Only recently I have been tossing around the idea of seeing if it would be possible for me to turn the property into a rental, and after building the house have it financed as income property. I would still like to build in cash so that I can do it on my terms, but would need to cash out when it is done to put into other investments.
So heres the details.
Purchased a lot for 8K in community with strong growth and a very desirable rental market. I plan to build a small simple 3 bed 2 bath home for +/- $100,000. I estimate the value if I were to turn around and sell it the home would be worth approximately $170,000, or rent for approximately $1,300+ per month.
I do not have acceptable proof of income to qualify for a mortgage personally, but am curious if you all have found it easier, or harder to receive a loan for a rental property? I figure I should be able to cash flow around $400 if I were able to finance the $110,000 as sort of a "cash out" finance and use the original money to rinse and repeat while adding $400 +/- passive income each time. Like I said I do not have any experience with rental properties so anyone with experience would be appreciated to chime in! I'm trying to decide which route I want to go with the build before selecting exact plans/finishes etc.