New to Real Estate · Galloway, NJ · Member since 2020 · 18 posts · 3 votes
I am in the process of comparing turnkey single family homes in hopes to purchase one as my first rental. From all of my research I'm finding that loans like usda and fha do not allow investment properties. Conventional loans that do allow investments want 20% down. Is there a solution to this I am just not seeing? Is there a loan maybe I havent come across that requires a lower down payment and allows investment properties? For the ones I am finding I can afford a 10% down payment. If anyone has any insight on this it would be greatly appreciated. Thank you.
If you do not already own a home you could buy a 2-4 Family as a Primary and rent out the other units and than in 6 months just rent out all of units. This way here you could put 10% down and after 6 months to a year refinance to take out some cash to recoup your initial down payment.
If you do not already own a home you could buy a 2-4 Family as a Primary and rent out the other units and than in 6 months just rent out all of units. This way here you could put 10% down and after 6 months to a year refinance to take out some cash to recoup your initial down payment.
Another way around that is to make your rental property a "vacation home." From what I was told if you make it a vacation home, you only have to 5% I believe (do not quote me on it). I have a lot of friends that own houses in Havasu as their vacation home. But they airbnb it out when they are not there.
Hi Mike. Look into Host Financial. They were offering 10% down loans pre-covid. When Covid hit, however, their investors got spooked, and some of that was put on hold. I had reached out to them about financing around that time, and ended up going a different direction. But maybe they're back? Or offering that again? Good luck!
I bought my NC property as a second home (vacation property) and only needed 10%. I read another response above that did the same. If you live far enough away from the location it's a plausible way to purchase using this conventional loan. Oh, and you are permitted to rent the home out when you are not "vacationing." They generally require you to spend 14 days per year at the property...but who's really counting?.
I am in the process of comparing turnkey single family homes in hopes to purchase one as my first rental.
Someone mentioned refinancing and pulling cash out 6 months later. Be careful with this because the only way you can pull money out is if their is equity in the property. Turnkey properties usually dont have that kind if equity in the first year or 2.
If you get a loan at 5-10% and refinance into a investment loan later on at 20-30% LTV that will also stop you from pulling money out.
IMO you really want to find a way to do "value add" to your properties. This will help you recoup some if not all of the cash invested for purchase