Loans for Investors
With about 30 different lenders to work with, we have access to just about any residential mortgage program available and we have strategically aligned those relationships such that we have a few excellent options for just about every scenario we've come across. If it's a pretty vanilla scenario, a conforming loan might do the trick, but often times it takes a creative Loan Officer and the right lender and program to get the job done. There are a number of programs available for investors ranging from programs that prove income using just one bank statement to programs that allow for credit scores down to 500 to programs that allow foreign nationals and many more. If you're looking for some creative financing options, you've come to the right place. Give me a call and we can discuss your scenario today.
Self-employed income borrowers and multiple investment properties
If you are self-employed or if you have multiple investment properties, you might have ran into road blocks in the past with financing due to income documentation requirements or due to the maximum number of mortgages you are allowed to have outstanding. We have multiple programs available that can address each of those concerns. Click here for more info on alternative documentation loans.
Leverage the power of prospective rents!
So here's a scenario I run into often. A young man or woman is tired of throwing away their money every month in rent and they see buying a house as a good investment, but maybe it's hard for them to justify the additional expense of a mortgage payment when compared to renting a small apartment or maybe it's difficult for them to qualify for the mortgage on their own. This is one scenario where prospective rents can be incredibly helpful. Let's say that our hypothetical young man or woman qualifies for a $200,000 single family home and let's say that his monthly housing expense is $1300/mo. Now let's say they went after a duplex with the intention of occupying one side and renting the other out. If they were able to rent it out for $1,000/mo they might qualify for a $300,000 home and their net housing expense would be closer to $750/mo. In this scenario it would allow them to qualify for $100,000 more, it would cost them about $550/mo less, and it would be a better investment in the future, as they could move out and rent both sides. You can expand that even further with a triplex or a fourplex. The guidelines for using prospective rents as effective income vary by loan program, but most will allow you to use 75% of the prospective market rent from any units to be rented as income.
Looking to buy an investment property? Maybe you should refinance instead...
Often times I have clients looking to purchase a new investment property and they're looking for a purchase loan. Sometimes that's the best answer, but sometimes it makes a lot more sense to refinance another property they own and use the equity from that property to buy the new one. Some property types are more difficult or more expensive to finance than others, for instance a manufactured home is going to come with a higher interest rate than a regular site-built home and an investment property is going to have a higher interest rate than a primary residence. It pays to think outside the box.
You don't know what you don't know...
So your plan is to buy and occupy a duplex with your VA loan eligibility and you're hoping to use prospective rents from the adjoining unit to help you qualify. You're thinking you'll stay there for a year or two while you save up and then you'll do the same thing again using an FHA loan. That sounds like a great plan, but there's a lot of fine print you'd be missing. For instance, the VA will allow you to use 75% of prospective rents as qualifying income, however they're also going to require you have at least 12 months of verifiable and successful landlord experience before they'll accept the rental income. Also if you used the FHA loan first you'd be OK, but if you used the VA loan first, when you go to use the FHA loan, HUD guidelines will require the new property be at least 100 miles from the one you're vacating. That's something you'd probably want to know sooner rather than later and I can help you with that.
If you're in the planning phases and you're trying to come up with a solid strategy, give me a call and bounce those ideas off of me. I'll help you come up with a plan of attack to get you going in the right direction. If you end up working with me in the future, that would be great, but even if you don't, I'm happy to help however I can.