Financing out of state investment property. Tricky...

3 Replies

First thank you for reading and helping.

So the background:

I own two condos free and clear. Rented at 1200 and 1700 a month on contract. 

I have a heloc on my primary for about 60k of 100k @3.5%. The house is appraised at 140k.

I have a credit score above 770 with all credit score measuring sources.

I want to purchase a condo in Nashville, TN for investment at first and potentially relocation in the next 5 to 10 years. 

I am looking at 200/300k.

On paper i make around 40k a year. 

How feasible is it for me to acquire an investment loan considering the above criteria?

Also what kind of rate would i be looking at?

Would using the remaining balance of my heloc as a down-payment on the investment property work for me or against me in qualifying?

Any and all help is greatly appreciated. 

Hi Chris, 

I think it really depends on the lender. I'm assuming your income of 40k is not from a W2 job. I think conventional lenders will have an issue with that especially since you are trying to buy a condo. Depending on what the ratio is of investors/owners in the condo complex, the lender might not want to lend on that particular complex regardless of your income/assets.

Again, I think it all depends on the lender!

One thing I do want to point out that you might already know. Nashville condos tend to have steep HOA fees. Something you might have to consider as it will have a big impact on your cash flow.

@Chris Daugherty  With the right bank, it possible to get a conventional loan. Given you are saying "on paper", I am assuming your income comes from business/self employment. In that scenario you want a mortgage banker that knows how to read business tax returns, and a lender that has underwriting staff that's trained as well. At a regular lender the answer is going to be NO.

Upen Patel, Mortgage Banker

Federal NMLS# 1374243

Originally posted by @Upen Patel :
@Chris Daugherty With the right bank, it possible to get a conventional loan. Given you are saying "on paper", I am assuming your income comes from business/self employment. In that scenario you want a mortgage banker that knows how to read business tax returns, and a lender that has underwriting staff that's trained as well. At a regular lender the answer is going to be NO.

Upen Patel, Mortgage Banker

Federal NMLS# 1374243

 Im not sure how many numbers and how much data i should put out there for all to see, but i do have w2s and tax returns.

My dilemma starts and ends with my documented income. It is just starting to rise. I work in the service industry. So my rentals are adding to my documented income, but my w2, paycheck and tax filings for the previous years are not ideal. That is why i say on paper i make around 40k a year. 

Ive owned one condo since September of 2014 and one since march 2015. So only the one condo is even on my tax return and it was only for 3 months.