Financing investment properties
require preparation
When apply for financing investment properties with lenders expect a lot of questioning of your personal and financial situation. The lender will run a credit report for you and your spouse to assess their risk.
Learn here about mortgage fraud and 2008 financial crissis.
This life investigation is the most embarrassing thing when comes to borrowing money for financing investment properties. Often banks request intimidating forms. Basically they create from information you give them, your financial picture, the
Balance Sheet,
accounting for cash savings and all incomes to create your joined asset list and also joined liabilities from credit cards and other mortgages you pay currently. The difference between the total assets and total liabilities is your current Net Worth, the bigger the better. Banks will lend money to people who prove they do not need them. Half joke half true is it? To make you feel better, think about the bank inspector or lending agent at the desk in front of you, that the chair is sitting on is not his property and may never be. The person in front of you has no assets and is doing only a job, but you the entrepreneur, soon enough, will be on your way with your loan, getting the assets and closer to your financial independence goal. You are using OPM (other people's money).
Stay away from NINJA loans.
Present a Business Plan
You do not need to write a book. With numbers collected from seller agent about potential gross income and taking out 50% for expenses, you create a first year
Income Statement Project
and demonstrate that the Net Operating Income will pay for the new mortgage interest and taxes. The bank wants to see you are knowledgeable enough to run a rental business. They want their risk of landing money to be as small as possible.
Invest your personal money
Banks and lenders in general want to see you coming with at least 10% of the deal as down payment. You give a Note to the seller for another 10% for three years simple interest not compounded. You see, this down payment is their "instant equity" in your property if you will default and the property gets foreclosed for 80% of property price/value. Banks do not rent properties and want to get rid of them quickly. Banks sell properties at discount to who wants them. See the article
Flipping properties between professionals.
This list of available mortgages is only for financing real estate transactions
Consider local banks before going to big banks
You are much better off applying for a loan with local community banks. Local banks are more inclined to finance small businesses in their area. You will generate jobs: landscaping in summer and snow removal in winter, maintenance and small repairs when needed. Local banks want to keep money rolling in their community. When refinance for cash out is a better idea to shop with bigger banks. For tips on boosting you credit score go to
Credit Score Repair
Consider Seller Financing as the first choice
Take a look and see what might be the mortgage payment today using this
"Free Mortgage Calculator"
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