Invest at this interest or pass?

Question

Hello,

Suppose your only option for getting financed was through a bank statement loan.  Would you buy cashflowing rental properties at 7 to 8 percent interest or would you pass?  Why or why not?

Thank you.

Joe Villeneuve · Answer

This tells me nothing.  10% loans could work, or a 3% loan wouldn't.

Need the rest of the numbers first.

Bryan O. · Answer

Account Closed I agree with the others; what do the numbers look like? No one cares if it's 15% if you got the property at a super steep discount. What is your strategy and what are the numbers?

Account Closed · Answer

The only type of loan I can qualify for is a stated income loan.  The properties I’m looking for are single family homes.  I’m going to base the cashflow on a traditional tenant even though my strategy is short term vacation rentals.  I’m in Las Vegas.  The lender is saying 7-8 % and it will be 30 year mortgage.  That is all the information I have so far as I have just been told over the phone I am pre-qualified.

David Fernandez · Answer

Underwrite the deals you get using this financing terms.

If you get the results you expect from them, go ahead (be careful with the rest of the terms of the loan: ballon payment, maturity, hidden feees, etc.). If this terms make the loan not viable, either look to structure the deal differently (creative financing, lower purchase price, etc.) or pass.

Invest at this interest or pass?

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