Here are three things you can expect a lender to look into if you’re thinking about investing in real estate.
On pretty much a weekly basis, we’re either asked, “How do I buy my first investment property?” or “How do I buy the next piece of real estate for my portfolio?”
As lenders, we’ll typically look at three factors:
We’ll look at your credit to determine how many bills you pay, how much debt you have, and what your liabilities are.
We’ll look at what kind of down payment you can afford. Most investment purchase programs will require a 20% down payment plus closing costs. For example, if you’re looking to buy a $300,000 condo, you can anticipate a $60,000 down payment to be able to begin the purchase process for that property. Sometimes there are other ways around it, such as when the seller wants to do private financing, but for institutional investors, this is a good baseline expectation to have. Some financial institutions might require more than 20% down.
If you’re ready to buy your first piece of investment property, we’d love to be the ones to provide you with guidance on how to accomplish your goals. Feel free to reach out to us so we can help you begin the process or answer any questions you have. We hope to hear from you soon!