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re: How does one purchase a true rental home?
Posted on 12/21/15 at 11:28 am to rpg37
Posted on 12/21/15 at 11:28 am to rpg37
No problem. Love the town and the people. With the increase in population, the town has become very crowded in some areas making a rental property there a good investment. If you can find the right property, location, and house. Feel free to shoot me an email with any specific questions you might have
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Posted on 12/21/15 at 11:46 am to HYDRebs
Thanks for helping him... my guess is that a lot of property in that area is rental and him developing a long-term relationship with a banker will be good.
Once you have one successful rental, people just want more =)
Once you have one successful rental, people just want more =)
Posted on 12/21/15 at 11:47 am to HYDRebs
quote:
to offset your DTI ratio's
it's usually a wash as long as 75% of the rent covers the PITI.
Posted on 12/21/15 at 11:57 am to VABuckeye
there is one new finance company i know of that will do a deal based on realistic numbers of projected rental income for that area(it can be looked up online) and not personal income. But you must submit everything to them to show them. Everything must be accounted for.
This post was edited on 12/21/15 at 12:01 pm
Posted on 12/21/15 at 11:58 am to rpg37
quote:
living in Oxford
You call that living?
Posted on 12/21/15 at 12:01 pm to Paul Allen
quote:
You call that living?
Off topic, but you wander why people think your initials are "TF" =)
Posted on 12/21/15 at 12:13 pm to LSUFanHouston
Don't forget to tune in today at 3 on 1350 AM
Posted on 12/21/15 at 3:30 pm to stevengtiger
Yes, it was a fixed 30 year. Rate is 4.375%
Posted on 12/21/15 at 3:34 pm to TigerAlum1982
quote:
Yes, it was a fixed 30 year. Rate is 4.375%
Thats pretty good. I have called a few banks around where I am and have not been able to get a 30 year fixed on commercial property. That is a pretty good rate too. The last 3 we have bought have all been around 4.25% but 5/1 deals.
Posted on 12/21/15 at 3:45 pm to stevengtiger
Some friends of ours closed on a rental last month and they also got a 30 year fixed from Capital One. Their rate was close to ours, but I don't remember exactly what it was.
Posted on 12/21/15 at 3:51 pm to TigerAlum1982
It that yours and/or thier first rental? I can't imagine a bank loaning someone 30 year fixed rate loans one more than one commercial property. Not that I don't believe you but I just need to call Capital One asap.
Posted on 12/21/15 at 4:00 pm to stevengtiger
Yes, it was the first rental for us and our friends. We bought ours not too far from LSU for the same reason you are looking at buying, hoping to rent it to a grad student or professor. Right now we have a "visiting" professor and his family in it. So far, they have been great tenants.
Edit....to correct some typos.
Edit....to correct some typos.
This post was edited on 12/21/15 at 4:03 pm
Posted on 12/21/15 at 4:08 pm to TigerAlum1982
My guess is if it was a 30yr at that rate it was a residential home loan instead of a commercial loan. ~4.375% is what we are pricing at today for a 30yr fixed investment property. Typically residential loans have longer options and are priced at better rates because they are less risky to banks.
Posted on 12/21/15 at 4:16 pm to TigerAlum1982
quote:
Yes, it was the first rental for us and our friends
That makes more sense. Once you have more than one "other" property, the banks will likely not offer those long fixed rates. That is great you got them while you could though.
Wish I had some property near LSU. My dad, who is also my partner in REI, bought two houses for me and sister while we were in school. Sold them after we left because he did not have the time to manage them. Would be paid off by now and straight cash flowing.
Posted on 12/21/15 at 6:46 pm to stevengtiger
First I'm not sure why you keep referring to residential rental properties as commercial. They are not.
Secondly FNMA allows mortgages on up to 10 properties per their guidelines so I'm not sure where this more than one other property thing comes from. Clearly it would fit in the guidelines unless certain other criteria (like being in a rural area) isn't met.
Secondly FNMA allows mortgages on up to 10 properties per their guidelines so I'm not sure where this more than one other property thing comes from. Clearly it would fit in the guidelines unless certain other criteria (like being in a rural area) isn't met.
Posted on 12/22/15 at 8:06 am to VABuckeye
quote:
First I'm not sure why you keep referring to residential rental properties as commercial. They are not.
Apologies about the terminology. I am getting commercial loans for the properties as they are not our primary residence.
quote:
Clearly it would fit in the guidelines unless certain other criteria (like being in a rural area) isn't met.
All I am saying was that it would not be in a banks best interest to have several long term loans to a single individual on property to is used for rentals. I am no expert on any of this and I am just going off what I have learned over the last year in talking/meeting with different banks in order get into REI.
Posted on 12/22/15 at 11:38 am to stevengtiger
If the loan is backed by FNMA or Freddie Mac the bank isn't at risk for a couple of reasons.
The primary reason is that most lending institutions sell the loans. They may retain servicing rights but they don't hold the paper. Or they may hold the paper but they sell the servicing.
Also, these types of loans are backed by FNMA or Freddie Mac.
They don't have to be a primary residence to get a residential loan on them.
The primary reason is that most lending institutions sell the loans. They may retain servicing rights but they don't hold the paper. Or they may hold the paper but they sell the servicing.
Also, these types of loans are backed by FNMA or Freddie Mac.
They don't have to be a primary residence to get a residential loan on them.
Posted on 12/22/15 at 6:47 pm to stevengtiger
Was it suggested by your banker that they place "commercial" (higher rate, shorter term) loans on your investment properties?
Other than a couple of multi-family buildings (with more than four units, bought later in life), a substantial renovation project and a duplex bought under extenuating circumstances, I never had to use commercial financing for residential real estate purchases early on. Now, once you pass a certain number of units owned (ten, I believe it is now?), you will have to seek alternate financing. But until then, as long as you and the property qualify (1-4 units), you can choose longer term, fixed rate FNMA/FHLMC and even HUD financing (I believe they're still doing FHA investor loans?), if you desire. And if a banker gives you some song and dance about needing to place you in a 1 year ARM product, with a 5 or 10 year balloon, just smile and walk away. Violence is never the answer (especially since banks have cameras all over the place).
Other than a couple of multi-family buildings (with more than four units, bought later in life), a substantial renovation project and a duplex bought under extenuating circumstances, I never had to use commercial financing for residential real estate purchases early on. Now, once you pass a certain number of units owned (ten, I believe it is now?), you will have to seek alternate financing. But until then, as long as you and the property qualify (1-4 units), you can choose longer term, fixed rate FNMA/FHLMC and even HUD financing (I believe they're still doing FHA investor loans?), if you desire. And if a banker gives you some song and dance about needing to place you in a 1 year ARM product, with a 5 or 10 year balloon, just smile and walk away. Violence is never the answer (especially since banks have cameras all over the place).
Posted on 12/22/15 at 7:54 pm to stevengtiger
I've gotten two 4.5% rates on two different properties with 25% down. 30 years and escrow included in the mortgage.
Posted on 12/23/15 at 8:08 am to Serraneaux
quote:
I've gotten two 4.5% rates on two different properties with 25% down. 30 years and escrow included in the mortgage.
That is great! Again, I am no expert on the loan side of it. I just know that I talked to several banks in my area, described our situation and goals and final settled with Bancorp South.
We have two properties with fixed rate 15 year loans at 4.25% with 20% down. After getting the first two, we have used a line of credit to buy the third, so we didn't have to put any money down. We will be rolling that line into a 5/1 15 year in the next month or so and freeing up the line again. Are there better terms out there for me? Probably but I am comfortable with where we are right now. We have already started looking for a forth house and another flip property as well.
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