Hello BP Community!
I'm seeking advice on how to acquire a first SFR without "house hacking." I have brought an investor on board to help me secure my first single family rental property. To analyze potential deals, what is a good interest rate guesstimate for a $250k home w/$25k down? I am using Investability.com to calculate COC, CAP Rate, Cash Flow, etc but do not know a good avg value to insert for mortgage rate.
@Kiel J. If you are looking at a conventional investment property mortgage, then you will need to put at least 25% down (i.e. $62.5 for $250k home). The rate for these mortgages are a bit higher. You could use 1% higher then a typical conventional loan to do your projections. It all depends on the circumstance of the borrower(s), loan and market, so no way to predict interest rate.
BP is full of useful resources such as forums and blogs. Welcome to the Bigger Pockets community-be sure to check out all the awesome BP blogs under “Learn.”
@Upen Patel is correct. You won't be able to get a non-owner occupied property for 10% down. It will be 20% - 30%, depending upon the lender and your overall qualifications.
I have more basic questions...
If this is non-owner occupied, I assume it is intended as some kind of investment property, likely a buy & hold. Why in the world are you targeting a $250k property? It is unlikely a property at that price is going to cash flow. If it does, I would be concerned about vacancy, since finding renters willing/able to pay the required market rate to maintain cash flow will be tough, and your pool of potential renters will be greatly reduced.
4% - 5% is a safe rate, assuming you can meet the down payment requirements.
I am interested to know what your exit strategy is. Also, I'm not familiar with investability.com, but why aren't you using the analyzing tools right here on BP? They are fantastic.
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing