Investment loans

10 Replies

Hi I live in Maryland
I wanted to buy an investment property to buy and hold
But I'm not sure who /lenders are lending for investors
Any big bank names?? Or should I try a credit union ?? Any suggestions
Would be good

I don't think you will have a problem finding a lender if you have 20% down plus closing cost.

Joe Gore

Smaller banks and credit unions are better sources for investment loans than the big guys. Many lenders don't do these at all, but some do.  As long as you meet the qualifications (20%+ down, 720+ FICO, can qualify without considering the rental income at first) you shouldn't have a problem getting a loan.

Start with the bank you already have a relationship with. You are a known entity with them. Keep in mind you will probably get different terms going with a commercial loan (if purchasing in an LLC) than if you are purchasing in your personal name. We use LLCs to buy and hold in MD and currently have the terms of 25% down for a term of 20 years. I am sure there are other options though, and personally, would like to do better than this. I am interested in finding out what everyone else is doing.

Hi Beth,

Great post. A couple questions. What kind of interest rate are you getting? Since you are doing the loan under an LLC is the bank asking for a personal guarantee and are they also looking at your personal financials? Maybe you are getting these terms because you already have other cash flowing properties under the same LLC? Thanks.

Originally posted by @Alberto Artasanchez:

Hi Beth,

Great post. A couple questions. What kind of interest rate are you getting? Since you are doing the loan under an LLC is the bank asking for a personal guarantee and are they also looking at your personal financials? Maybe you are getting these terms because you already have other cash flowing properties under the same LLC? Thanks.

 best not to use the llc to get a loan. it's easiest (still takes 45 days) to close using your personal information. will need around 20-25% down, good credit score and you are good to go!

Like James said most places will not close under an LLC. If you do close under an LLC you'll still be guaranteeing it until your looking at large commercial loans.

You'll have to carry the mortgage without calculating future potential of rental income most likely. Credit score, DTI, income, job history are some of the major things considered when taking a app for investment loans.

The sales contract can list the LLC from the start - this will help you avoid transfer taxes in the future (when switching the property from your name to the LLC's). The loan is still going to be personally guaranteed, but the sales agreement can list the LLC.

The LLC can be used at closing but you will be giving a personal guarantee as well.

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