Rental Property Investor · Denver, CO · Member since 2016 · 66 posts · 44 votes
Hi all! My husband and I have two properties in Denver, CO that became rentals by circumstance, not intentionally. We're looking in to buying our first "on purpose" rental property. We're currently living in Akron, Ohio for a work assignment, although we'll move back to Denver in ~2 months.
We're looking at buying in the Akron/Cleveland area because the Denver market is out of control and properties seem to cash flow much better here. Several of the properties we're considering are around $50K and I've read most banks won't give you that small of a loan.
We have enough cash to buy it out right, but I'd rather leverage our cash to keep our options open for another property down the line. Are there options for small mortgages? Thanks!
This is what I've found out going through the same process.
Local banks where properties are located (ie. credit unions, regional banks, etc) - They won't lend to out of state investors unless you have own a 2nd home or are employed in the area. Terms, rates, and fees are competitive. Slightly higher than conventional.
Conventional financing - I've seen some banks go down to 10K. Terms, rates and fees are the best out of the other options. Contact @Jerry Padilla
Portfolio lending - The lowest I've seen for an individual property is $45K loan amount based on 75% LTV (meaning property must appraise for min. $60K). Terms are short term 5 year fixed based on 25/30 year amortization. Rates are anywhere between 7-10%. Points and fees are high. Financing is asset based and normally requires an LLC.
Peer-to-peer lending - These are sites like lending club, prosper, etc. These are personal loans with rates around 10%. Fees are 1% of the loan amount. They will go down as low as you want and as high as $40K.
Hard money or private lender - Short term, high rates and fees. But this is good for transactional funding and fixers.
Late to the party! I am looking to try to refinance my investment properties. The majority of my properties are around Youngstown, Ohio. Their values are 50-70k. Most commercial lenders will not lend to me having them so low. The only company so far willing is Lima One Capital. They have a 75k min value on a single property, 60k min value for properties in a portfolio. There are 1.75 points charged. There is 650 processing fee base + 150 for each additional property in the portfolio. There is a 500 appraisal fee for each property. They take 30-35 days to fund.
Tomorrow, I will try calling local banks. But since we are newly self employed due to COVID- I am not sure what our luck will be.
If anyone has found any other solutions- I would greatly appreciate it!