After speaking with an investor today that said he could get financing for a property with only 20% down, I started thinking, ” How could this be?” I contacted a lender I have know for a long time, Wanda Alday with Element Funding www.ElementFunding.com , to get the current information on qualifying for rental property. Contrary to popular belief, you can buy investment property with only 20% down (most people tell you you 25% down) if you meet some very strict qualification, including credit score and cash reserves. Here’s a quick breakdown of the information Wanda provided.
Credit score over 770 to get by with 20% down. Interest rates are determined by credit score Many investors want 30% down Rent loss insurance can be waived if the total debt is used in ratios and rental income is not. 6 months cash reserves left in the bank Cannot use any funds from a business if borrower is self employed All funds must be liquid, even for reserves. Rates are real good for investment but they are really tough on credit and reserves. For a 2-4 unit investment, minimal is 70-75% ltv depending on scores. For a conventional loan you can only have 4 properties total (including your primary residence).
The rental market in Lighthouse Point is extremely well and most properties are being rented in about 2-3 weeks tops. This leaves an open door for investors looking to hold on to properties and rent them for the long term. If you would like a list of available properties that would make great rentals, can send it to you. This is a great way to offset the cost for college tuition for a younger child. Purchase a rental property now while rates are low and see the benefits of real estate in 15 years later!!!!http://www.thinkglink.com/article/2009/01/19/rental-property-income-pays-college-tuition
If you have any more questions let me know and we will try to get them answered for you, or you can contact Kim Nelson at 954-263-8373 I can also put you in touch with Wanda!