I'm really excited and ready to get my first investment property. I'm currently stuck on what my first move should be to obtain. I have a list of properties that have really good potential (monthly cash flow) but I need to have a contractor give me an estimate to solidify those numbers. Also, I'm not sure as to which way to obtain financing. I have good/fair credit and I should be able to obtain a conventional home loan, but I don't want to pay 20% down. Is Hard money lender the best way to go? And should I choose the property first prior to the contractor estimate and then obtain the loan? Please help! My goal is to have at least 5 rental properties by the end of this year and I need to have rental in place by the end of Aug in order to complete my goal. Thank you
Hi @Larita Jolly ! Lots to consider when first getting started, huh. I would keep it simple and do 2 things: 1) Get pre-qualified with a lender. Either a bank or mortgage broker. They can explain some options for you as to how much down payment will correlate to what rate or program. 2) An inspection contingency in your offer when you make it will allow you time to hire a professional home inspector to evaluate the property. Don't need to drag a contractor around. If things come up on the inspection report, you can consult a pro then.
A realtor may be able to help you. @James Wise is in your area. I don't do hard money. Check a normal lender first. Lastly, goals are exactly that. Don't rush and become a 'motivated' buyer. Take your time and good luck!
Welcome to the site. Traditional financing is the way to go. Your going to need 25% down but it's the best finanincing you will get.
HML are not good for rentals. Those are high interest short term loans.
Short answer is NO, don't use a hard money lender for a rental. If you can't afford the 20% down, one option is to find a duplex that you can buy as an owner occupied property (you live in one side). You can probably get away with a 5% down payment going that route.
As far as the order of your process, you probably can't pick the best property unless you get a good picture of the costs to get each property up to rental shape. You may be able to hire a contractor for a small amount of money to visit certain properties and give you bids for them. Eventually you'll get a
I'd say don't worry about the 5 properties yet. You should be focused on getting the first one done right, the rest will come later.
Thank you all for your reply. I have the 25% but I don't want to use it all because it's all I have saved this far for investing. I can't move into the rental because I already own a home and don't want to move at this time. I'm looking for the no to low money down deal and I can pay for fees points or closing cost is this possible? I keep reading on bigger pockets how people are able to do such deals. Or can I get a HML and after rehab refinance?
You must be a BiggerPockets member to post on the forums
Join the world's largest, most open Real Estate Investing Community online, 100% free forever!