Advice on Pre-Approval Amount

2 Replies

Hello Everyone! 

I am preparing to purchase my first investment property and am looking at a variety of different strategies (mainly multifamily & house-hacking), but I am struggling with what to seek for a pre-approval amount. 

Say I get a pre-approval loan to purchase a house for up to $500k dollars. This based on what I want to put down (although I could put down more) and what I'd like my monthly out-of-pocket expenses to be. However, many multifamilies in my area go for much, much more than $500k. In many scenarios, these properties would bring in cash flow sufficient to offset my out-of-pocket expenses or eliminate them completely. In other words, although on paper I'm responsible for more out-of-pocket expenses, I can more easily cover it. 

This brings me to my question. Should I try to maximize my preapproval amount to ensure that I am taken seriously when evaluating larger multifamilies? Does it even matter in the end? 

Any help or other people's experiences on this topic would be appreciated. 


I think you're stuck in paralysis by analysis. There's not a real choice here. Your paperwork says what your paperwork says. 

If someone seeks a $500k preapproval, but their paperwork makes clear they qualify for $1.25m, I'll just send them both PDF files. If they have a Realtor, and requested $500k when they filled out the online application, the Realtor just gets the $500k one from me, because I'm assuming $500k is what they and their Realtor have been discussing. If the buyer wants to share the $1.25m PDF, that's up to them.