Board Topic: Buying Rental Property
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Buying Rental Property

Posted by: RG May 11 2004, 11:00 PM
Looking for helpful hints on buying a rental property that only costs 35k. Financing hints and ways to save on closing cost ect....
Want to get into property with lowest amount out of pocket.
Are there ways around PMI besides putting 20% down?
Beginner looking for help.

Posted by: loanuniverse May 12 2004, 12:01 PM

The amount of the transaction is low, and there might be receptive lenders out there that can accommodate you. For this small transaction, I would approach a residential lender to see if he has some kind of "investment property" program.

I only deal with much larger requests, and don't usually see anything under $500,000 hit my desk. The kind of requirements that we need from our borrowers are not the same as you might be required for a loan this size. I would think that the underwriting for such a deal will be much easier and flexible.

If I were you, I would run some numbers before my meetings {meet with at least two lenders} so that you can make a case for the deal. While some people do not like the idea of going to a bank and sitting across a lender, it really is not as bad as buying a car.

Also PMI is used for residential products, commercial lending does not require PMI on our loans. However, you might be required to do so if the "investment property" loan that you get has that characteristic {I just don't know what you will be offered}.

Good luck

Posted by: RG May 13 2004, 07:06 PM
Thank you for your reply, I was lucky and the older lady selling the house will owner finance the deal. The money I saved will all be added to the down payment.

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