Financing My First Rental

5 Replies

Hello BP Community,

I've been working all year to get my first rental property under contract and it's finally happened!

I had a conversation a while ago with the commercial lender where I bank locally, and I thought I was going to be able to finance the property with 20% down, using a conventional 30 year loan. It turns out this is not the case with this bank, so I'm looking for suggestions. Does anyone work with any banks that do this, or have recommendations for a loan structure that could get me as close to this type of financing as possible?

A few details about the property: It's in North Carolina. The purchase price is $130,000. As I mentioned, I'd like to put 20% down and have a 30 year term with a competitive rate. If possible, I'd like to have a short (if any) limitation on refinancing. It's definitely in livable condition, but I'd like to make some improvements that I would probably end up paying cash for (or utilizing an equity line on my permanent residence), then refi to pull some of the money back out to hopefully use for the next property.

Any suggestions or recommendations would be GREATLY appreciated!

I've been shopping for mortgage recently myself. I found that TD Bank is fairly competitive. You should probably try them. They are mostly in Northeast area like New York. But you can try to call their customer service number.  

Quicken Loan usually offers a lot of flexibility, but they can be expensive. Best of luck!

@Brian Baker

Any chance you are a member or can become a member of State Employees CU? If yes, check their loans for rentals..

"Up to 80% financing available for the purchase of a rental property or for a non-cash out refinance of a rental property; further limited to 65% loan-to-value for cash out refinances. Each member may finance up to two rental properties."

Hi Brian you are thinking of all of this correctly. I used PNC and did 20% down for 30 years. Typically banks will want 20-25% depending on the relationship you have with them. Granted I knew the broker I dealt with so I was able to get 20% down. Talk to more lenders and see what they say. Good luck!

Congrats on your first deal.  I used Union Home Mortgage for my first deal in NC.   They may require at least a 6 month seasoning period. PM for specifics.