Beretta Only: Things to consider about Rental Property Loans

Tuesday, October 9, 2018

Things to consider about Rental Property Loans

If you are getting into the rental business, rental property loans, can be quite confusing. The following article will endeavor to clear up some confusion and attempt to answer the following questions: Where do you even start? What do you buy and who should you get advice from?
The first step before you even think about applying for an investment loan is to know your credit profile. Why? Because this will give you a sense of the amount of money you can qualify for and this amount will help guide your search for investment properties.
Review your credit score from all three major bureaus, Experian, Trans Union, Equifax, and do your best to dispute mistakes and clear up lingering debts. However, be wary, and consult with experts before you try to improve your credit score. Even the best-laid plans such as paying off old debts and closing old accounts might potentially have a negative impact on your score.
After you know your credit score and take steps to improve it as necessary you'll want to get a sense of how much "house you can" actually afford. That is you want to approach potential lenders and get an estimate about how financing you can actually qualify for, which help narrow your search for investment properties.
In the case of rental property loans, you can increase your eligibility by knowing the numbers before hand.
After you find a property, you might want to purchase you need to have an in-depth sense of the costs associated with your investment.
First, consider the cost of carrying your loan, can you afford to make monthly payments while you wait to secure a tenant? If not you might want to think twice before taking on a new loan. Do you think the property will need repairs in order to make it ‘habitable," if so you need to factor in the cost of repairs into the amount of financing you apply for, (i.e., You may need to borrow more money than you initially thought).
Above all ask the question, do you have enough cash on hand to make the 20 percent down payment needed for Arizona Investment Property loan? If not you might need to look at cheaper homes, or consider alternative steps to raise the necessary down payment.
Once you have a good sense of the numbers, you can start to take the following steps.
To increase your eligibility for rental properties loans, consider taking the following steps:
Your first job is to gather any relevant paperwork before beginning the application process. Typical documents needed include two months of bank statements, investment account or IRA statements, two months of pay stubs and other documents as requested by your lender.
Then you'll want to consult some experts. An accountant can help you avoid paying additional taxes on any rental income you may earn. In addition, you should also consult an attorney who can discuss strategies to protect from legal liability. Do your best to get plugged with other local real estate investors in your area; this will give you a sense of the market, and where to find the best deals.
After gathering the necessary paperwork and consulting with experts its time to get your loan pre-approved. It is always best to have your loan approved in writing before putting in an earnest offer; otherwise, sellers are prone to overlook your bid.
Once your offer is made, and your loan finally has closed, congrats you have just purchased your first rental property.

There are, of course, a lot of other things to consider but this article gives an underlying sense of the process involved with purchasing your first Arizona Investment Property.

Dennis Dahlberg Mortgage Broker[3][2][2][2][2] Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com
Dennis Dahlberg Broker/RI/CEO

About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.