Investment Property Loans
May 4, 2010 by Chris Yates
Filed under Investment Property Loans, Real Estate Investing, private money lending
When you go to buy your next investment property, you’ll probably find that obtaining an investment property loan is not as easy as it used to be. There are a lot of companies offering loans for investment properties and you can certainly get approved, but you’ll need to be aware of the current rules of the game.
The days of no down payment or low down payment options are a thing of the past. You’ll be expected to put 20%-30% down and you’ll need to have excellent credit. If your credit is good, but not great, then expect to put even more cash down. Is it still possible to get an investment property loan with no money down? Actually, yes, but these loans are usually obtained from a commercial lender that will accept cross collateral (a lien on an additional property that you already own) in lieu of a down payment.
Your best bet will be to look for a mortgage broker that specializes in investment property loans in your area. They will usually know of all the lenders that offer financing options that will meet your needs, and will be able to structure the best deal for your scenario.
In addition to knowing the best financing options, they may also have other clients that both purchase investment property and fund private investment property loans themselves. Savvy brokers will often have a few private lenders in their pocket to bring in when traditional loan options are not available.
Private lenders often have funds sitting in a self directed IRA account specifically for funding private notes for individual investors that cannot get a traditional investment property loan. Depending on the interest rate they require, this could be a win-win option for everyone involved, so stay open-minded.
Be sure to ask around, search the internet, and find the best options for you. Don’t get frustrated if you don’t find the perfect solution right away. The best option for you could exist in a single relationship that is right under your nose. Do your homework, know your limits, and take it one step at a time.
