My main question is every book that I've read says that I should have my financing first before I start searching for properties. I was wondering how to do that, if I don't know what to tell the bank before I go look. I have a really good idea of the properties i'm looking for but how do i know what perimeters I should narrow my search to, the actual numbers. I also have some good leads on where to get a loan from (around the Augusta, GA) area. Also a financial resume ready to go. Can I see how much of a loan I can get with my down payment and then go or.. i'm just kinda confused as it seems to me like a chicken or egg problem.
All things being equal: you should know how much you can borrow with the amount of money you have to put down, for many banks want 20% down. If there is a lack of experience the bank might require you to put down more money.
In addition, some banks will give you a pre-approval without knowing what property you are buying; some will not.
Michael is right, but you didn't specify consumer or commercial, if you are taking about a conventional home loan, the down payment requirement can be from 0 to 20% (or more if a non-owner occupied loan).
It's called being "pre-qualified" where a lender may give a loan commitment subject to property requirements or simply tell you what you can borrow if the property meets certain guidelines.
You can certainly talk to a commercial lender for basically the same information but they may or may not give a commitment, that's generally due to the fact that income from the project is also counted, without that applied to the ability to pay, they can't really say if you and the property will qualify.
But go talk to lenders in your area. :)
Well actually now that you mention it I don't know if I would be looking for a consumer loan or a commercial loan. Let me state my goals and see if that helps you... to help me. I'm trying to flip a property this year and get a long term rental property this year. Both properties I was looking at are in the 100k range. I currently have two morgages right now through VA for my primary residence and my wife's old house. I have the 20% cash funds to cover both loans, I'm just wondering exactly which loans I should be looking for, terms, points.. all that for each transaction.
Need to speak to your bank, one to fix and flip is an acquisition rehab loan, your hold property is either, conventional at probably 25% down or commercial, probably the same...could be 20%. The rehab is a short term commercial loan.
Try the banks first, then there are hard money lenders for your flip, depending on your experience and home value, they may lend more but it will cost more too. :)
Cameron, pm me and we can discuss some options.
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