Hi there - I'm a seasoned flipper who is getting into my first buy-and-hold. $55k purchase price, turn key, vacant (current tenant is moving out before closing). When I reached out to my lenders I learned they all have min loan amounts of $70k-$75k! So now I'm stuck having to close on it with my cash, and refi, which I was hoping to not have to do. (or sell it I suppose)
How do people usually finance these low cost rentals?
Cheers, Happy Investing!
Hey @Scott Randall ! I finance my low value properties using loans from local commercial banks that are built specifically for buy-and-hold rentals or for renovations that turn to buy-and-holds. So far I've bought a $56K home and a $62K house on these with no issues. They aren't fixed rate for the life of the loan and are typically amortized over 15-20 years. So, commercial loan vs. mortgage loan.
Best of luck in the buy-and-hold game!
Find a small town local bank or credit union . 50 grand here is a fancy home ! That’s not a low cost rental . Other than my personal residence I don’t own any apartment buildings that expensive even my triplexes !
Thanks everyone for the help! Had to pass the deal on to another investor, couldn't find a bank in time. Most wanted 1-3 yr term with balloon payment; or had minimum values that exceeded. Some wanted me to cash out refi as it would have appraised for significantly more than I bought it for - however, I wasn't interested in taking out an unnecessarily large loan (and likely over leveraging the deal) for this particular project. On to the next one!