Property Manager · Hallandale, FL · Member since 2018 · 53 posts · 11 votes
I have notice that many (majority) banks don’t like to lend on a property less than 75k. If that’s the case what happens to those that try to purchase properties that are less than 75k? For example in markets like: Detroit, South Carolina or Alabama?
Lender · Glenview IL- CDLP NMLS#230554 · Member since 2015 · 2k+ posts · 747 votes
7y
@ Joel Gierbolini We do not have restrictions on lower loan amount as long as prosperities are in livable condition. I think its The $30k rental club thread which you can follow for more lenders information.
Lender · Glenview IL- CDLP NMLS#230554 · Member since 2015 · 2k+ posts · 747 votes
7y
@ Joel Gierbolini We do not have restrictions on lower loan amount as long as prosperities are in livable condition. I think its The $30k rental club thread which you can follow for more lenders information.
Technically speaking, Fannie Mae and Freddie Mac have no minimum loan amount restrictions. Lenders have overlays. Many have overlays because it's more labor intensive to originate a 30K loan than 300K loan and the lender makes considerably less money.
Those low loan amounts give lenders problems because they become high cost loans.
A lot of banks do not have a lower limit, but at some point the cost of financing actually brings you a lower or similar return on investment than buying cash. My commercial lender will go down to 50k for my clients, but they only do it because I send them volume and I always have to buy them a few bottles of wine for doing so.
@Keyonte Summers I have tried and I have not been lucky. Any recommendations?
Have you tried like huntington bank not sure if it is one down there but you might have to call a few more financial institutions every place is a it different.
Rental Property Investor · Cortland, OH (44410) · Member since 2019 · 54 posts · 11 votes
7y
@Courtney Jones do you bank with chemical? It’s an awful name but someone I know works there and I may put our business banking with them but not sure yet. Thoughts?
Portland, TX · Member since 2019 · 1 post · 0 votes
7y
There are places that will create loans for less than 75K. I just purchased a rental for 57K. I used Randolph-Brooks Federal Credit Union (RBFCU) in Texas for the loan. The downside is that they required 25% down, because I purchase my properties through my LLC and the loan is considered a business loan.
Rental Property Investor · New Castle, DE · Member since 2016 · 376 posts · 158 votes
7y
My 1st (and only for now) investment property had a loan of $46k. Lending was through Trident Mortgage, but was sold to Wells Fargo a few months ago. Interest rate isn't the lowest as points were added, but my cash flow is worth it.