@Juan Juarez , Welcome to BP! I think the best thing you can do starting out is partner up with someone who has experience in real estate investing until you get some skin in the game. You should also try looking into some hard money lenders. Best of luck! Feel free to PM me with any questions.
Thats not a logical answer for a bank to give. Maybe a credit union. But a bank cannot deny you a loan on a house because you don't have any experience buying homes. Thats just plain silly.
A credit union can do anything they want and I somewhat understand their approach. They don't have to follow guidelines to lend their money. But they have a much different approach to the risk they're taking too.
You can get a conventional loan all day long with a credit score of 730. I would go to a standard bank and ask them. Are you able to put down the 25%? Are you looking to house hack and buy a house to move into yourself and then after a year or two, move out and keep it as a rental?
That would be my best advice to you to be honest. Buy the home as an owner occupant. Move in yourself and wait a year. Then buy another house as an owner occupant and move into that one and turn the other one into your first rental property. You can do that up to 5 times......
The advantage to that is that its much easier to buy a house as an owner occupant. Easier qualifications. And you can get a conventional loan with great 30 year fixed rates from fannie mae now with only 3% down payment.
At your age, it would be worth the hassle of moving to be able to add 5 properties with loans of 3% down and great 30 year fixed rates.....
Juan, I bought my first investment property before I owned anything. Not sure what bank you are working with. But I have a few banks that only work with investor loans that could help you out. I work with lots of clients that obtain investment property before they own a personal residence, so I know it's possible.
Go to a bank, not a credit union.
Hi, I made a different assumption when I read your post. I thought you might be trying to get money to fix and flip. If so, hard money would be your best bet. It is expensive, but it is short term. Normal banks really do not like to lend on houses that have enough problems that they are not livable. If, however, you wanted to do an FHA 203K (the FHA loan that lets you fix up an owner occupied house) or simply buy a four unit building or something, I would go to another lender. I really like the idea of a first property being a small multi unit that you live in. That way you can get some good landlording experience to see if you like it, and you will have to fix things that come up. That is a good way to get started in my book.
Look for a small bank that preferably carries their paper in house. We applied with one for our first two rentals and they "made exceptions" for our limited experience and allowed us to close on the homes.
Also - all inquiries within a 30 day window count as one, to give you a chance to shop around. So like others have said ago - go apply at a bank for a conventional loan.
This community is awesome. Thank you all for your quick replies and great advice. I'm gonna try a bank in the next couple of days hopefully that works out.
Any specific banks that yall recommend that work well with first time buyers?
I wonder if it might make sense to go to a mortgage broker and let them do some work for you to find a loan? Having a middleman always costs some money, but it might make sense to pay it to get the help you need to find a loan...
Welcome to BP @Juan Juarez
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