Newbie Lending/Funding Question:

5 Replies

So, when looking for a lender to purchase a multi-unit rental property, one of the requirements many lenders look for is experience. So, for a new investor that has not owned and/or managed any of their own properties, will experience of past employment working for a property management company count for those lenders?

Originally posted by @Melissa Kee :

So, when looking for a lender to purchase a multi-unit rental property, one of the requirements many lenders look for is experience. So, for a new investor that has not owned and/or managed any of their own properties, will experience of past employment working for a property management company count for those lenders?

How many units are you talking about? Working in the bussiness can help, but lenders will not always take working in the bussiness the same as being an owner and actual investor.

Sometimes a work around we have used when people don't have experience is ask for a proof they have a reputable property management company who will be managing it for at least the first year.

@Melissa Kee

Conventional financing backed by Fannie Mae doesn't require a 2 year rental experience history - only Freddie Mac does to count rental income. 

If you choose a lender without this overlay, that can follow Fannie Mae's guidelines directly than you can count potential rental income at 75% of the lessor or market rent or lease agreements on new investment purchases. 

Having a history of property management may help your case, but it is going to be underwriter dependent, if the lender has this overlay of requiring rental experience.

Originally posted by @Melissa Kee :

So, when looking for a lender to purchase a multi-unit rental property, one of the requirements many lenders look for is experience. So, for a new investor that has not owned and/or managed any of their own properties, will experience of past employment working for a property management company count for those lenders?

 Assuming 2-4 unit residential real estate and Fannie Mae financing, there is no experience requirement.