Investment Property Loans for your Real Estate Investment Clients
For some reason, this week was Investment property loan week. With that in mind, I wanted to just cover a couple of investment property loan basics for you. Here we go:
- Loan to Value – They can put as little as 20% down, but 25% down gets a much better rate.
- Seller Paid Closing costs cannot exceed 2% of the sales price
- Investors can do a cash out loan to 75% on a 1 unit property
- Investors will need to show 6 months reserves for every investment property that they have as investment property
- Some lenders will allow investors to have up to 10 properties.
- If an Investor wants to purchase a home with all cash and rehab the home, they will need to wait 6 months to refinance based on the new appraised value, otherwise, they will be required to use the original purchase price as the value of the home.
- The property must meet Conventional HUD minimum property standards(not be in need of substantial repair)
This is a conventional loan and is considered permanent financing, and is not the loan an investor is looking for to purchase a home that is going to be remodeled or needs remodeling.