Small loan mortgage for Investment Property - Impossible?

Question

Hi there! I'm thinking about getting my first buy and hold property, and after all the reading and researching I've done, and considering my personal situation, I think an out of state turnkey would be best for me. Sidestepping all other tangent subtopics on this for now (I believe books have been written on the subject), my question is about financing only. For now. :P

At the moment I'm just looking at options for getting pre-approved. I have enough for 25% down for a 70k-100k property. But! I heard from a few RE vets AND a quicken loans broker that I won't be able to get a mortgage like that, especially for a non-primary residence. Does anyone have some perspective or experience with this and can shed some wisdom on the subject? I am a newbie, so general suggestions are welcomed as well, but I'm particularly curious about this financing question. Thanks!

Sara K. · Answer

Hi Michael,

Our first (and only, thus far), investment property was purchased in 2017 for $80k with 20% down (so only financed $64k). As far as I know, this lender is still making these loans. I'd be happy to give you the information of the person we used, we've actually gone through her to purchase 2 primary properties since 2012 as well.

eta: I should add, this is with no other debt beside primary home and 1 car lease, good credit and a good income.

Mark S. · Answer

@Michael Kagan, you should be fine.  My lowest purchase price for turnkey so far has been $73,000 SFR and I financed it with 20% down.  There are lenders who specialize in this space.  PM me if you want more info.

John Warren · Answer

@Michael Kagan you can definitely finance a property of this amount, but you will pay fairly high closing costs. This doesn't mean it isn't worth doing, but there is the old saying "is the juice worth the squeeze". For lenders, it is the same amount of paperwork to do a 70k loan as a 400k loan, but they make a lot more on the larger ones. This means the ones that operate in this space have to make a few bucks on fees.

Erik Soto · Answer

hello, i am in the same situation, looking for a small mortgage loan. Would you be able to help a newbie out? Thank you in advance

Deniz Eker · Answer

Can I have the name of your lender?I am in same situation for a home in Ohio,have good credit, little debt.

Michael Kagan · Answer

@Michael Ohara, and that's why I came here. :)

@Mark S. and @John Warren thank you for your insight!

Open-ended question everyone - how did you finance your first deal, and what was it?

Michael Ohara · Answer

I work with private lenders who offer low-minimum loans to investors.  It's your lack of experience that will make it difficult getting financing.  Recommend partnering with an experienced investor for you first one.  All the best.

Small loan mortgage for Investment Property - Impossible?

Most Popular Reply