So I'm in the process of getting a pre-approval for an investment property. I'm looking for a Quad in my area. In order to even begin looking at some of the properties on my list, the sellers want you to be pre approved. I have no problem with that.... my concern is this, I will obviously only purchase a property if the numbers work for a positive cash flow. I know just by doing a preliminary crunch on available numbers that the asking price is way too high. So I would need to begin an investigation with the owner regarding actual numbers. This would allow me to come up with an offer amount. This could take some time finding the right property. So tying this in to the pre-approval question...once I recieve a pre-approval letter, I think they are only good for 60 days or so. I do not want to have to keep pulling credit reports to keep my pre-approval up to date. What is the best course of action in this situation? Any input would be greatly appreciated.
Get pre-approved for the maximum amount of loan you will need, based on the maximum amount of purchase price you are willing to pay. Have the lender indicate that your approved "up to" a specific amount at a specific rate, for a specific property type and loan type. A lot of people freak out and say, "well if the seller knows I am approved for a higher amount, then they will raise the price." The sales price is what you are willing to pay...based on your budget and supported by an appraisal at/or above that value.
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