Best Loan Options for small Rental

[Kyle Smith]

Hey everyone. What do you all think is the best strategy for buying an inexpensive house ($50,000 to $70,000) that you plan to rent out? I want to use as little of my money as possible. I am currently living at my home using an FHA loan so I am not looking to do that again.

[Erik Estrada]

It would be tough finding a lender to do a loan for $50,000 and it might come at a bigger cost since there is no real gain for them to issue a loan of that size. You can probably do a cash out on your primary but there is limits to this since it is an FHA loan, (maintaining 20% equity, living in it for over 12 months, etc...). The minimum loan amount for most asset based lenders is $75,000 and the lowest I have seen is 15% down.