Everything I need to know about financing

10 Replies

Tell me everything I need to know about financing my first turnkey property. I mean everything, even any terminology that I might not know. To narrow it down I plan to spend 80-110k on a turkey property and hold it long term, and have a property manager. Is 20% always the requirement for down payment? I'm in the Kansas City area if there is anyone in that area that offers financing. If you think I need to know it about financing tell me here! Thank you

@Joshua Engemann , do your research. There is a ton of information already on BP. Simply use the "Search BiggerPockets" at the top of the screen. Why rely on other people to tell you what they think is important or correct - when you could figure it out yourself? No one is a better advocate for you than you.  Plus, if you don't understand the basics how can you evaluate a TK deal or know if your PM is acting accordingly? 

Most people who have done this have spent countless hours learning, researching, networking, and figuring out how to do this stuff. It's short sighted to think someone can provide all that hard work in one post. 

as @Dan Krupa said, use the search and read tons of articles, listen to podcasts. 

Talk to lenders, they will tell you what you need to get a loan from them. Network with turnkey sellers on BP and they will help you with the process. Everyone's situation is different so no one can give you what YOU need to know.

best advice is research heavily in generalities then maybe ask a bit more specific questions for clarity. 

I enjoy helping people advance their knowledge when they are genuine, respectful, and/or give some indication that they might return the favor some day to someone else who is just starting out. You seem to think you are special, entitled, and give no indication that you care for anyone other than yourself. Good luck.

@Dan Krupa and @Alexander Felice my post must have really came off wrong. I understand that the best way to learn is to do the research myself, I wasn't looking for all the answers in this one post, and what I actually expecting is for people to point me in directions to do research or suggesting articles. I am really new to BP and haven't got past the forums to find the other info. I'm sorry if I came off as just wanting fast answers without the work. I should have been more clear. Thanks for replying though, I appreciate it.

Jeff Rabinowitz coming to the conclusion that I am not genuine and that I only care about myself based on one post on a forum seems unfair and harsh. I do not know why you felt the need to reply with such a negative view. None of these things are true and I am genuinely excited to learn more about REI.

@Jeff Rabinowitz coming to the conclusion that I am not genuine and that I only care about myself based on one post on a forum seems unfair and harsh. I do not know why you felt the need to reply with such a negative view. None of these things are true and I am genuinely excited to learn more about REI.

20% is not the requirement, although it is if you seek financing from national lenders (sometimes they even require you to do 20%+). Best strategy and advice I've received on financing, is to look at credit unions and local lenders which can do 80%+ LTV for your loan - i.e. you can put 15% down!

Moreover, if you seek financing through an LTV, many lenders won't allow you to do so but private, local, and credit unions again may have some flexibility.

The most important part of financing is to look into the different financing products that are out there, and educate yourself on the difference between and ARM and a 30Y fixed. More importantly, crunch the numbers and see which financing strategy works for you. My personal preference is to always get an IO of some sort, and do a rolling refi, but thats again my choice. Best of luck!

@Joshua Engemann Some lenders will allow a 15% down payment but you will have to pay mortgage insurance. You'll need 25% down for multi family properties. I interviewed one of the top investment property lenders on my podcast show recently. You can find it on my website. I think it will explain a lot of basics for you.

@Joshua Engemann I would suggest reading books and listening to Podcasts. There's a ton out there so I would start with the one's suggested by BP.  Once you have read/listened to a few, you may be better equipped to ask more direct questions that will point you in a more specific direction.  The answers you get will only be as specific as the questions you ask.  Make your questions count.

Best of luck!

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