I started looking for local lenders in the state I was going to invest in and have been pretty happy with the outcome so far.
Many of the local credit unions had limitations of being a resident of the city they were located in but I did have luck with some smaller “regional” banks that operated through the state I was investing in or they operated within a two or three state area.
@Thomas Testa any local bank in the area where the property is located should work. They will likely sell it off but it doesn't hurt to start to develop a relationship with them if you plan to buy a lot in a certain area.
Thank you for the insights, @Kevin Co @Jay Helms and @Jeff Kehl . Sounds like it's best to try and work with a bank directly in Maine. I'm hoping to invest in several properties from Southern Maine up to Portland so it sounds like a good idea to start building relationships with local banks. Hopefully the non-resident factor isn't a hurdle.
@Thomas Testa the non-owner occupied rules will apply which are not as great as owner occupied financing but not as bad as full commercial lending. For example for single family houses I had to put down a minimum of 15% and for buildings up to 4 units I had to put down 25%.
Also, the financing rates were about 1% more than typical best rates for an owner occupied loan. I unfortunately didn’t realize this until I went on my first trip to the city I was investing in and sat down to meet the lender I had been emailing and calling. When he told me about that I spent that night in the hotel re-prioritizing all my planned viewings and re-doing all my calculations for properties I had been researching which eliminated about 25% of the places I had been looking at because the numbers changed.
One last note...as a non-owner occupied loan you can not qualify for 203k (home renovation loan) so any property that you find that may “need some work” you will need to find other financing for it or have the capital to pay out of pocket. (also note that I'm just a guy on the internet, not a banker disclaimer blah blah)
Thanks for the additional info @Kevin Co . That 25% down payment is exactly why I'm looking in Maine vs Massachusetts as there's less capital needed to invest in a Maine 2-4 family or even 4+ family (excluding Portland!). There needs to be a bit of a market correction in MA before I continue investing there. But not too big of one thought, those rents need to stay kinda right where they are ;)
Look up Corey Scott with Merrimack mortgage. I have done 3 loans with him. He' on BP but I can't get my phone to tag him.
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