Financing Question

5 Replies

Hello BP,

I have been working on finding a property to invest in. I have about $30k for a down payment however I am not able to qualify for a conventional loan because my debt to income ratio is too high when the mortgage payment is added into my expenses.(E-3 in the military) Wells Fargo has a loan for future income based mortgages however I need
* Receipt of a security deposit from the tenant and verification of the deposit into your  account
* 2 months of bank statements verifying receipt of rental income.
So I can only purchase a home with someone living there already.

My problem now is how do I go about finding such a property? I want to find one in Washington or Oregon. I have considered this turnkey management "" but they only operate in the East coast.

A 30K DP could land you a couple of TKs in the Midwest/ South that would give decent cash flow with traditional terms in decent neighborhoods. Talk to a few providers in those areas- It will likely surprise you (it did me).

Related note- I am on the insanely overvalued Left Coast as well. If I'm still around when the market corrects, I plan to utilize my VA benefits and purchase something that will cash flow and has the chance to appreciate. Something for you to consider.

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What Robert said is totally accurate. You have to work with a lender who understands and wants to work with investors. You can buy something turnkey that will have a paying tenant in the property by closing and the lender will usually account 75% of the rent amount as income to offset your PITI costs. I am just south of you in Eugene and I started investing in turnkey properties out of state back in 2012, when it was much harder to get loans than it is now. I had some challenges on the first loan due to a narrowly focused underwriter, so had to switch lenders to get an final approval.

@Steve Gunasingh, One thing you can try is to call some property management companies in the area you are looking for properties.  I have purchased two of my properties from owners who were using a property manager that I connected with.  We started off just talking local real estate, etc... over a cup of coffee and I mentioned to him that I was looking for properties with tenants in place.  One of his managed properties owner's mentioned to him that he was looking to get out due to being tired of land lording, etc...  I swooped and bought it off market at a reasonable price.  This happened twice with the same property manager.  The tenants stayed in place both times, one actually extended their lease and that property manager now manages both houses for me.  It worked for everyone.  I provided the owner's the ability to get out from the house without needing to displace the tenants and without dealing with dozens of people trampling through their house and disturbing the tenants or pm, the tenants were able to stay in place, and the property manager didn't lose two of his properties due to the sale.  Win, win, win, win!!!

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