New Investor in Las Vegas Financing Questions
Hey Everyone,
I'm a first time investor from Las Vegas and getting financed efficiently will most likely be my biggest hurdle. My strategy will be to buy and hold long term and use forced appreciation to increase cash flow. I don't currently own any property and am looking to buy/owner occupy a 2-4 unit, possibly more. Biggest issue is i'm still building my credit (at about 610 right now) and was laid off a few months ago but am about to start a new job. Which type of loan do you think will be the best fit for what i'm looking for to allow for the highest chance of approval? And what can i do to help improve my approval odds? My goal (as i'm sure is everyone's) is to put the least amount of money down/into payments to allow for the highest cash on cash return available. I have a couple people with stable jobs and better credit that are willing to have their name on the loan as well if that helps.
Thank you!!
Tyler Simon
@Tyler Simon if you're looking to owner occupy your best bet is an FHA loan which is 3.5% down and score as low as 580 (although lenders may have additional overlays such as a 620 min). Co-signers are good but I personally find it cleanest if you can do the loan yourself.
Other options include seller financed deals, but the 3.5% down will be hard to beat.
Good luck!
@Tyler Simon Your job history could be an issue. Is your new job in the same industry as your previous position?
Yes it would be in the same industry
I'd suggest contacting some lenders to discuss your scenario. They'll be able to tell you if there's a waiting period or not.
I would weigh your options- there are more options available to you than just that FHA loan especially if you are planning on owner occupying it
@Tyler Simon Some things you can show lenders to improve your approval odds for an FHA loan if you have a high debt to income ratio:
- Show you have extra money saved up in the bank (i.e. cash reserves) for mortgage payments
- Once you start your new job, show that you'll be able to save money each month after paying your mortgage and monthly bills
- Show that the monthly payments of the loan you're applying for isn't much more than your current rent/housing expenses
Also, just a heads up that putting less money down doesn't necessarily increase cash on cash return, since higher monthly P&I expenses, plus mortgage insurance (on a downpayment of less than 20%) decreases monthly cash flow.
That you for your insight!! I will keep all of these points in mind when looking for deals/rates.
I appreciate everyones help!