Pre-qualification in a different state?

Question

Hi Friends!

Early stages in our quest to become real estate investors, and we have been pre-qualified by a lender in our home state of CA. Thanks to BP and David Greene's book, we are feeling more comfortable with the idea of investing in an out of state market - looking mostly in the Portland, OR area - but wondering if we need to be pre-qualified by a lender in that state as well?

Thanks,

-Ben

Margaret Shields · Answer

We recently had the same question. Living in Hawaii and starting to invest in Oregon. Working with a regional bank turned out to be the solution for us. In fact we just got approval for a second mortgage with them (Umpqua Bank) and so are on the hunt for our next Oregon rental. Good luck!

Ben Van der Fluit · Answer

Thanks for the valuable feedback!

Mathew Wray · Answer

@Ben Van der Fluit

I agree with John. Technically, you're going to have no problem as long as your lender can operate in Oregon, although having someone familiar with the area, norms, and players won't hurt. From a practicality stand-point, using a local lender who is a known quantity in the area can help strengthen your offers in a still competitive market. Put yourself in the seller's shoes: if they have two offers on the table and one is from an unknown out of state lender (or national, faceless, on-line lender) and the other has closed tons of deals with your agent and is a known quantity, who do you think you'd go with?

Let me know if you're interested in reaching out to a few locals folks to see if there may be a good fit with one of them...I'd be happy to make introductions.

Good luck!

Mathew

John Warren · Answer

@Ben Van der Fluit you will want to make sure your lender can do loans in the state you are investing in for sure. Lenders are not always licensed in multiple states. In addition, it can be nice to have a lender who "get" the local market. I know I personally prefer having a lender who is local.