I am looking for a good investment mortgage broker in the Charlottle area that could help finance my first investment purchase.
Does anyone have any recommendations?
This will depend on how you want the deed titled. If you don't mind having the deed in your personal name, you can get financing based on your personal credit & debt to income ratio with no more than 5% down. If you plan on taking ownership through an LLC, you will use a commercial lender. Usually 20% down with a requirement that rents are 30% above your monthly payment (if rent is $1300/month then payment can't exceed $1000/month). Your interest rate on a commercial loan will be about 1-2 points higher than a loan taken in your name.
Keep in mind that you might have significant personal debt that would keep you from buying more property in your personal name. Taking ownership in your LLC offers some asset protection & allows you to qualify for a commercial loan/mortgage based on rent coverage. Personal loans are subject to Fannie Mae guidelines which limit your debt to income ratios and the number of loans in your name.
I can recommend good lenders for either scenario.
Thanks for the overview Curtis. Seeing that this is my first investment purchase, my wife and I were planning on keeping the property in our names until we were able to purchase more properties then we would develop an LLC and have the properties deeded to the business.
The problem I have had speaking with lenders is that at least a 20% DP is required for investment properties, and I don't want to come out of pocket for that amount if I don't have to. I would really be interested in a lender that would only request 5%, and then implement the BURRR strategy. Could you give some guidance on lenders in Charlotte that you have had success with?
Your expectations may be slightly unrealistic @Christopher Scott Emory II . As this is your first investment property, it's going to take a lot of convincing for any lender to become comfortable enough with you to achieve that rate and DP. If you can't come out of pocket 20% for the downpayment, your options are either creative seller financing or to use a private / hard money lender. With the latter, the interest rate will be much higher than 5%, but you will at least be able to complete your first deal and build confidence with traditional lenders for your next projects. I also know a private money lender in the area that does not charge interest, but structures the deal as a joint venture and assumes a 50% equity position in the underlying property. Reach out if you'd like his contact information.
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