- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
How does one purchase a true rental home?
Posted on 12/20/15 at 10:17 pm
Posted on 12/20/15 at 10:17 pm
I currently own two homes. However, living in Oxford and seeing that Ole Miss is growing exponentially with its student population, I have seriously been looking at the idea of purchasing a rental home with the sole purpose of renting it out for profit. The town of Oxford is extremely small for its population and its growing student body has almost doubled in 15 years. There are currently no plans to end the growth in the foreseeable future.
My question is would a relator look at this plan as something different than just another home purchase? I know they look at the magic number is your gross income more than 28-33% of your home mortgage...well, would this count against that figure if I showed them the plan? If so, what ways can I maneuver to eschew this?
My question is would a relator look at this plan as something different than just another home purchase? I know they look at the magic number is your gross income more than 28-33% of your home mortgage...well, would this count against that figure if I showed them the plan? If so, what ways can I maneuver to eschew this?
7
Posted on 12/21/15 at 6:46 am to rpg37
Start your research on biggerpockets.com
Your loans for a rental property wouldn't be a standard mortgage because you're using these homes to make money and not to live in.
Your loans for a rental property wouldn't be a standard mortgage because you're using these homes to make money and not to live in.
Posted on 12/21/15 at 9:08 am to rpg37
If you have good credit, and money for a decent down payment, you should be able to find a lender to give you a mortgage for the rental. But this is investment property, so the programs are different. You will want to do some research to determine what you think you can get for a monthly rent, what expenses might look like, etc.
Posted on 12/21/15 at 9:11 am to LSUFanHouston
quote:
If you have good credit, and money for a decent down payment, you should be able to find a lender to give you a mortgage for the rental
But you will not get your typical 30 year deal with an escrow account. Most loans in my area on rental properties are 5/1 15 year loans. You pay taxes/insurance on your own. If you are interested, see if you can get a line of credit from a lender. Buy the property with the line of credit and roll into a more fixed loan a month or so later. Prevents you from having to put any money down up front.
Posted on 12/21/15 at 9:30 am to rpg37
quote:
My question is would a relator look at this plan as something different than just another home purchase?
A realtor may but a lender will not. Honestly, who is going to lend on growth projections? No one I've ever heard of for sure.
quote:
I know they look at the magic number is your gross income more than 28-33% of your home mortgage...well, would this count against that figure if I showed them the plan?
Um, of course it's going to count. Those are lending guidelines.
Posted on 12/21/15 at 9:34 am to stevengtiger
quote:
But you will not get your typical 30 year deal with an escrow account
You absolutely can get a 30 year fixed rate mortgage on an investment property with escrows included. It will also require a down payment that is substantially larger than the minimum down payment for an owner occupied property.
Posted on 12/21/15 at 9:40 am to VABuckeye
quote:
You absolutely can get a 30 year fixed rate mortgage on an investment property with escrows included
What type of rates are you getting with this? Most of the banks around me will not offer a 30 year fixed on commercial property.
Posted on 12/21/15 at 9:44 am to stevengtiger
quote:
Most of the banks around me will not offer a 30 year fixed on commercial property.
OP is asking about residential use. You are absolutely right about commercial use.
Posted on 12/21/15 at 9:46 am to VABuckeye
quote:
I have seriously been looking at the idea of purchasing a rental home with the sole purpose of renting it out for profit.
I was looking at this from the OP. Was about to make a phone call to someone about a 30 year fixed on my rentals.
Posted on 12/21/15 at 9:54 am to rpg37
is Oxford over 50 miles from your primary residence?
Posted on 12/21/15 at 10:18 am to rpg37
We bought one this past summer in BR (loan is from Capital One) and they required a minimum 20% down payment.
Posted on 12/21/15 at 10:31 am to TigerAlum1982
quote:
they required a minimum 20% down payment.
Just curious, were you able to get fixed terms? If so, how long is your loan period?
Posted on 12/21/15 at 10:33 am to stevengtiger
20% down and 15 year fixed is what most banks offer that I've talked with
Posted on 12/21/15 at 10:37 am to yellowfin
quote:
15 year fixed
Not sure why, but we have not had any banks tell us that fixed is an option. Most of them are telling me that 5/1 15 year is our main option on commercial. And we have plenty of capital and good credit.
ETA: What type of rates are you getting on the 15 fixed?
This post was edited on 12/21/15 at 10:38 am
Posted on 12/21/15 at 10:45 am to VABuckeye
quote:
It will also require a down payment that is substantially larger than the minimum down payment for an owner occupied property.
not mine unless you are referencing people who put less than 20%. Always the basic 20% down for my first 4 and after that 25% per fannie mae guidlines for SFH with residential loans not commercial.Now if he uses private lending then yes the down payment and interest rates will be more but term will be shorter.
This post was edited on 12/21/15 at 10:48 am
Posted on 12/21/15 at 10:57 am to rpg37
In Mortgage Banking here, and have several friends and family that have invested in the Oxford area over the last 10+ years. Rental properties there can be a great cash flow and can be a easy way to get equity assets. A comparable rent schedule can be used by lenders to offset your DTI ratio's particularly when you a have mortgage payments on multiple houses.
If you want any more help or advice I can post my email for a few minutes. I know the oxford area very well and could help you with any other questions on the finances that would be involved
If you want any more help or advice I can post my email for a few minutes. I know the oxford area very well and could help you with any other questions on the finances that would be involved
Posted on 12/21/15 at 11:17 am to HYDRebs
That would be great. Post your email and I'll shoot you s message.
Posted on 12/21/15 at 11:18 am to rpg37
No problem
This post was edited on 12/21/15 at 11:21 am
Posted on 12/21/15 at 11:19 am to HYDRebs
Got it
Posted on 12/21/15 at 11:20 am to rpg37
I appreciate any help. I live in Oxford now and teach and coach. Plan on staying long term.
Page 1 of 2
Popular
Back to top
Follow TigerDroppings for LSU Football News