What do Lenders look for in, to accept working with you?

Question

Hey everyone! I am just starting out and I want to wholesale but also at the same time look for rental properties. The only thing is, I don't have much credit history (about 7 months of credit history) and I have been in my job at the moment for about 8 months now. So my question is if I go to a lender and ask them to help fund me the deal. Will they look at my work and credit history and say no? Or do they just try to see if the numbers fit and they like it and they will do it? I just want to see if I should wait little longer to do rentals or could I hop in now? Thank you guys!

Peter M. · Answer

@Jesus Cordero Its easy. They want money. And they want proof that you will have the ability to repay via a track record or collateral i.e. property value. If you dont have either, they will turn you down. Simple

Jaron Walling · Answer

@Jesus Cordero It depends on the lender but the VALUE or FUTURE VALUE of the property plays a big part. Lenders only care about risk and numbers. They are not real estate investors. They don't want to foreclose on properties people can't afford. Conventional loan rates are historically low right now. Aim for that if you're new to investing.

If you talking HML they look at the numbers and need to know your plan. They base the deal and loan terms from previous projects (flips, rentals, partnerships, etc.) aka experience. This is not a cheap loan because the risk is higher and the money comes quick. The deal needs to stay on budget and I on time and eventually get refinanced into cheaper money.

Jesus Cordero · Answer

@Jaron Walling thank you! I will for sure start making some calls to banks, I appreciate the help!

Jaron Walling · Answer

@Jesus Cordero I am not a lender. Contact a local bank or CU to get pre-approval for a loan. I would avoid HML if you don't have much experience. You need to fund the rehab. Ask the family, friends, or find a partner that understands REI.

Jesus Cordero · Answer

@Jaron Walling would I be able to qualify for the conventional loans? and if so, would you recommend me to find a HML for the rehab budget?

Jesus Cordero · Answer

@Jaron Walling @Peter M. thank you guys for reaching out! I appreciate the advice!

What do Lenders look for in, to accept working with you?

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