What rates are you getting on SFH rental properties?

Question

Hello Everyone,

Apologies if I am posting this in the wrong area of the forum.

I am trying to find out what rates and terms lenders are offering on fixed rate rental properties (non-owner occupied) in your area.

Mostly, my local credit unions are not willing to take the interest rate risk and are offering mostly ARMs out to 5 or 7 years with 20 or 25 yr amort periods.  Some of the nationwide investor programs (asset avenue etc) I am seeing 30 year amort, fixed, in the mid to high 6s.

Ideally,  I am looking for 20-25% down, with a high 4s low 5s rate, with no seasoning period. What are you all finding?

Thanks

JD Martin · Answer

I have done two earlier this year, one at 4.25 and one at 4.75. The 4.75 actually locked in late last year, so if I had waited another month I could have done a quarter percent better or so.

Jeff B. · Answer

From what you show, it appears that you are being offered a Commercial Loan, ask for a Consumer or Residential Loan.

Justin Fox · Answer

CMG Financial will do refi and conventional on investment properties for 4.5/4.75%.  Give them a call.  The deals depend on your DTI and credit though I'm sure.

Michael Pouliot · Answer

Ali and JD,  can you please provide referrals for lenders you have worked with?  Thanks.

Ali Boone · Answer

Yep, that will limit you. You have to personally guarantee loans to a mortgage lender even if you are using an LLC...so it doesn't help there. Plus most lenders won't lend conventional loans to LLCs. But you did say "would sit"...does that mean they are sitting in LLCs now? If they aren't, do go the LLC route yet because you will shoot yourself in the boot for financing.

Most banks, credit unions included, don't have a clue how to lend on investment properties with conventional mortgages. You have to work with an investor-friendly lender or you will never close a property. Sounds mostly like you've been talking to the wrong lenders.

However, there will be a seasoning period, no way around it. (but you can be quite strategic with those...)

Michael Pouliot · Answer

I should have mentioned, the rental properties would sit in an LLC, which somewhat limits my options I imagine.

What rates are you getting on SFH rental properties?

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