Not a single lender/broker/realtor shows any interest in helping. What does it take to get approved?
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[{"id": "hndu4fd", "text": "Are you talking to lenders in the areas you\u2019re looking to buy? Most lenders only focus on their geographic area. Also, if you\u2019re only doing 2-4 unit buildings, residential lenders can provide you loans. Once you find a lender, ask for a Realtor referral.\n\nAlso, don\u2019t confuse primary residence with investment properties, there are different lending requirements. You\u2019ll likely need to put 25% down and with closing costs, you\u2019ll probably be looking at a max price of $300k, assuming the property cash flows.", "replies": [], "depth": 1}, {"id": "hne4i42", "text": "Most banks won\u2019t approve anything without a minimum 2 year employment history.  Investment property loans also require more $ down than owner occupied loans.", "replies": [], "depth": 1}, {"id": "hnekao1", "text": "Local banks and many lenders do not like out of town small multi residential owners unless you have a deal or two in a locale as a track record.\n\nContact lenders like Velocity, ROC Capital, Lima One or Silverhill. \n\nAlternatively there are wholesale companies like MBanc, ARC, Nations Direct etc and some regional or national banks that offer DSCR rental property loans that ate non-QM. You need a good mortgage broker who is signed up to these lenders.", "replies": [{"id": "hnf0jnu", "text": "This is important for OP. I'm familiar with some of these lenders guidelines. They will probably want 25% down payment plus at least 3 months principal, interest, taxes and insurance as reserves. Preferably more to cover tenants vacating and property repairs. Going out of state you will need to identify a good property management company and have their resume to submit to the lender why you think they will do a good job managing your property. That is your max purchase power. There are also DSCR constraints because these lenders often only look at property income, not your personal income. In California prices are so inflated you are often DSCR constrained to around 50% LTV, not the 75% LTV mentioned above. Scottsmans guide may mention other small investor lenders.", "replies": [], "depth": 2}], "depth": 1}, {"id": "hneon14", "text": "Find a commercial lender that will lend on a 4 unit building, or go above and get a 5+ unit. When you get into the commercial side, the broker looks at the performance of the property, and your financial history, rather than just if you can pay it off. They look to see if the property will most likely cover itself. It\u2019s called the Debt Service Coverage Ratio, or DSCR. \n\nIt\u2019s a way better and easier, IMO, way to get into the business of growing and scaling properties. I assume in the next 12 months the same types of loans will be back for short term/AirBnB properties too. \n\nKeep looking, they are out there. Also - good point from good guy, either find a local bank who knows the area (but you have to build a relationship), or a large national bank who just strictly works off of the numbers. Find a mortgage originator who holds the loan on their books, as long as the property makes good cash flow, you will get approved (waived Jedi hand).", "replies": [], "depth": 1}, {"id": "hner44o", "text": "You could pay an arm and a leg for a non qm res loan. Or go with hard money on a 25 yr amortization, 5 yr call. You\u2019d pay a lot more in interest but it would get you in. Then you could refinance into something more stable when the income shows that longer term proof. Somewhat risky though.", "replies": [{"id": "hnfjox9", "text": "Nope. Don\u2019t do this. You need proper financial structuring you need a good lender like me that knows what he/she is doing. The truth is lenders don\u2019t know how to calculate income and service debt- heck even underwriters don\u2019t know. A great Loan Consultant is hard to come by- realtors are a dime a dozen. A great lender is extremely hard to find.", "replies": [], "depth": 2}], "depth": 1}, {"id": "hneve19", "text": "Try Visio lending or another asset based loan. You\u2019ll pay 200 bps above a conventional primary residence.  Usually still makes sense. If you need to show a track record find someone with one to assist.  Hope this helps", "replies": [], "depth": 1}, {"id": "hnf3q84", "text": "I am a residential mortgage broker and I do loans for this kind of stuff all day. 1-4 units. There are a lot of loan products people don\u2019t know about and ways to qualify using the property instead of your income.", "replies": [], "depth": 1}, {"id": "hnf7cha", "text": "I'd recommend you put down 35% or more. It might take a few years.", "replies": [], "depth": 1}, {"id": "hnfe0p8", "text": "In California, I\u2019m a lender and I could do 15% down on the 2-4 units. Non owner. The property has to have a positive cash flow. Last two years wouldn\u2019t matter as long as the property qualifies. Taxes have to be complete of course.", "replies": [], "depth": 1}, {"id": "hnfpocw", "text": "Assuming there\u2019s 25% down, there\u2019s definitely a way to get this deal done.", "replies": [], "depth": 1}]