First Investment Property in Toledo, Ohio – Are These Financing Terms Competitive?

Question

Hi everyone,

I’m an international real estate investor currently purchasing my first rental property in Toledo, Ohio, through my LLC.

I’m planning to build a portfolio of rental properties in Ohio and would appreciate feedback from experienced investors on the financing terms I’ve received.

Property and Loan Details:

• Location: Toledo, Ohio
• Purchase Price: $59,000
• Loan Amount: $53,100
• Down Payment: $5,900 (10%)
• Loan-to-Value: 90%
• Interest Rate: 8.25%
• Loan Term: 30 years (360 months)
• Monthly Principal & Interest: $398.92
• Loan Type: Fixed-rate, Buy & Hold
• First-position lien
• No prepayment penalty
• No balloon payment indicated

Location: Toledo, Ohio

Purchase Price: $59,000

Loan Amount: $53,100

Down Payment: $5,900 (10%)

Loan-to-Value: 90%

Interest Rate: 8.25%

Loan Term: 30 years (360 months)

Monthly Principal & Interest: $398.92

Loan Type: Fixed-rate, Buy & Hold

First-position lien

No prepayment penalty

No balloon payment indicated

Additional Fees:

• Origination Points: 4.5% ($2,389.50)
• Appraisal/Drive-by Inspection: $650
• Underwriting: $950
• Survey: $875

Origination Points: 4.5% ($2,389.50)

Appraisal/Drive-by Inspection: $650

Underwriting: $950

Survey: $875

Total listed fees: $4,864.50.

My Questions:

• Is an 8.25% fixed rate over 30 years competitive for an investment property?
• Is a 4.5% origination fee too high?
• Are these closing and underwriting fees reasonable?

Is an 8.25% fixed rate over 30 years competitive for an investment property?

Is a 4.5% origination fee too high?

Are these closing and underwriting fees reasonable?

• Would you negotiate these terms or consider another lender?

Would you negotiate these terms or consider another lender?

My goal is to acquire three rental properties in Ohio, so I’m looking for a reliable long-term financing partner.

I appreciate any honest feedback and advice.

Thank you!

Marc Del Priore · Answer

Hi Luca, welcome to the Toledo market. For a first rental, the two numbers I would pressure test are the 4.5 points in origination and whether that 90 percent loan to value is based on the purchase price or an appraised value, because that mix drives your true cost of capital more than the rate alone. An 8.25 fixed rate for 30 years with no prepayment penalty is workable for buy and hold, as long as the rent comfortably covers the payment with room for taxes, insurance and reserves. Since you plan to buy three properties, it is smart to line up a lender who can repeat the process instead of renegotiating from scratch each time. I am Marc with Royal Partners, and I help investors structure this kind of long term rental financing. If you want a second set of eyes on the quote, send me a DM with the property rent, your target loan amount and timeline and I will walk through how it stacks up.

Nyisha Walton · Answer

Hi Luca, thanks for posting the full terms. The 8.25% fixed rate and lack of a stated prepayment penalty are worth reviewing, but the bigger issue is cost relative to loan size: the fees you listed total $4,864.50, or about 9.2% of the $53,100 loan. Before signing, I would confirm in writing that the 90% LTV applies to a foreign-national borrower using an LLC, that the rate is fixed for all 360 months, and that there are no minimum-interest, exit or servicing charges. If you want, send the property rent, taxes, insurance, ownership structure and target closing date, and I can help you compare the quote on the same assumptions. No pressure.

Erik Estrada · Answer

8.25% on a 10% down investment property is pretty good. I am seeing that on 20% down with no or low points. No prepayment penalty is also very good.

Keep in mind it's a small loan so $4k in fees is very low profit for a lender to originate. Seems like you have a good deal here.

Redgy Saint-Germain · Answer

Luca,

the lenders covered what to ask, so here's how I'd look at it from the investor side.

On a loan this small, the fees matter more than the rate. Your $4,864 in fees is about 9% of the $53,100 loan, and a lot of that is fixed cost a lender charges whether the loan is $50k or $300k. That's pretty normal on small loans, but it tells you where to push.

The rate is less painful than it looks. A quarter point on $53k is only about $9 a month. So if a lender will cut the points, I'd take that over a lower rate. One point is $531 today, and if it only buys you a quarter point, it takes around five years of savings to earn that back.

My usual go-to is a local credit union or small bank. Being an international borrower with an LLC may rule some of them out, but a few calls to Ohio banks that keep loans on their own books is worth it, especially since you want three. Ask if they'd do all three under one relationship.

The real test is whether the rent covers the $399 payment plus taxes, insurance, vacancy and repairs with room to spare. If it does, these terms are workable and you can refinance later.

Redgy

Adam Summerer · Answer

The part nobody's mentioned yet is the loan size. At $53k you're under the minimum for a lot of DSCR lenders, most I've seen start around $75-100k and only a few go down into the mid 50s, so tiny loans like this tend to get priced with heavy points to make it worth it for the lender. That's why 4.5 points plus the UW/appraisal/survey fees eats so much of your cash in. I'd get one more quote from a lender whose minimum actually fits a $53k loan and compare the total cost over your first 3-5 years, not just the rate. No prepay is a real plus though, keep that.

Stacy Raskin · Answer

Generally, it's harder to find reliable funding sources for DSCR loans under $100K and even more difficult to find reliable funding for loans that are under a $75K appraised value. Loan options will vary by state and whether the property is in a rural area as that affects loan program eligibility.

It's the same work to do a $50K loan as it is to do a $500K loan and generally lenders and mortgage brokers have a floor fee for what they will do the work for.

As far as rates, what influences those most heavily is the borrower credit score and LTV. What also impacts them is that many lenders will charge a slightly higher rate once the loan falls under certain loan amounts such as $150K or a $100K (if a lender does loans under a $100K as many lenders don't).

Also, since you mentioned buying the property through you LLC, it sounds like you are not doing a conventional loan since you can't use LLCs for vesting for conventional loans. If you are doing a DSCR loan or other business purpose loan than those loans are not regulated the same way as owner occupied conventional loans and the rates and fees can go up or change all the way until the day of funding even if nothing changes about the loan such as the appraisal coming in lower than expected and having that affect LTV which can affect the rate.

Because of business purpose loans such as DSCR loans' rates and fees being able to legally change it's important you work with a mortgage professional who is researched and you feel comfortable with. Happy to connect to discuss further.

Divin Kanyama · Answer

I’d shop this quote before committing, @Luca Marotta. The 8.25% rate needs to be compared with offers for the same international-borrower profile, LLC, loan size, and 90% LTV. No prepayment penalty is a plus—just confirm in writing that it’s fixed for all 30 years with no balloon.

The 4.5% origination fee is where I’d push hardest. Ask whether it buys down the rate or pays lender/broker compensation, and request a breakdown of underwriting and survey charges. I’d get competing quotes and ask for a lower-points option rather than judging the rate alone.

For your three-property goal, compare total borrowing costs and cash flow after taxes, insurance, vacancy, management, and repairs. A low down payment isn’t much help if fees leave you short on reserves. Just my general take, not personalized financial or legal advice—have a mortgage professional and cross-border adviser review the details before signing.

Ryan Baker · Answer

Luca, nice to see you moving on the Toledo deal. I won't get into rate comparisons here, but a few things to check on any term sheet: on a $53k loan, a 4.5% origination plus the other fees comes to over 9% of the loan, so ask whether a minimum fee is driving that and whether a lower-origination option is offered. Also ask about the prepayment penalty (length and steps), whether it's truly fixed for 30 years or fixed then adjustable, required reserves, and whether the 90% LTV is based on purchase price or appraisal. Getting at least two written quotes on the same day is the cleanest way to compare. Since you're planning three Ohio rentals, it's worth mapping out the financing for all of them together. Happy to walk through it on a quick call. My direct line and email are on my profile.

(Drafted with AI assistance.)

First Investment Property in Toledo, Ohio – Are These Financing Terms Competitive?

First Investment Property in Toledo, Ohio – Are These Financing Terms Competitive?

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