Bank financing - Landlord Forum thread

Bank financing by RNB (NC) on June 14, 2012 @09:01

I am purchasing my first rental cash. I want to improve it, then get a mortgage. I've talked to some institutions and have heard a few things.
I can get 2 or 4 properties financed at 30 yr best rates, get resold.
After that rates change based on financial strength.
One place told me they will only loan up to 80% what I pay, not improved value.

What am I likely to find as best scenario if I shop a lot. Ideally I'd like to find one place to keep my business at.
What interest rates?
What LTV? After I improve it or before?
Any suggestions or pointers?

I aim to get several properties as soon as I can. I have very little debt, good credit rating, and can afford to pay 30 year notes on 5 properties at least.

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Re: Bank financing by Jake on June 14, 2012 @10:51	[ Reply ]

If you are determined to purchase rental properties you should buy one and not acquire more for a period of 3 years. At the end of that time you will know if this is the way for you to go. There is a lot involved with renting properties. It is not for everyone.

Re: Bank financing

Re: Bank financing by Anonymous on June 15, 2012 @18:13	[ Reply ]

put down as little as possible (20-25% usually for investment property) and finance the rest on a 15-year note. the interest expense over the years (even at low interest rates) is dramatically less for a 15-yr note vs. a 30-yr note. that and you get a lower rate on the shorter loan. spend what's needed in cash to prep the place to rent. (i'm assuming you don't need to double the purchase price for that purpose...if it's such a dump, consider if the investment is worth it.) as others suggest, try this out for a bit and make sure it's for you. if it is, repeat. also consider multi-family units at that time, too. one advantage to real estate is the ability to use leverage (i.e., other people's money) to make your investment work for you. this allows you to use your remaining cash elsewhere for other investments.