Getting that first investment property..

[Moriah Giles]

Hello everyone, I have been studying RE investing for a few months now and deciding I want to invest in my 1st single family property, locally. I currently rent out an apartment with a one year lease (halfway thru), Have about $3k saved. I know there's different options with financing but would it require I move out of my current location to live in that new property and rent out rooms? What if I just wanted to rent out the entire home. Do they have loan options for first time buyers wanting to be non-owner occupied? Thank you biggerpockers family. 

[Daniel A.]

Hello,

While I likely won't provide you with much useful information, I will see what I can do. The main loan that requires you to actively reside in the residence is an FHA loan and so far as I can recall, it requires that you live in that residence for at least a year. It also requires that you move into that residence within 60 days of signing the agreement. What I would recommend is that you speak with a loan officer at your local bank and ask about the provisions. Even if it's just an educational journey, actually getting out and talking with loan officers gets you in the mindset of getting things done.

There are a lot of other provisions and restrictions, but there's that. As to other types of loans, it's really one of those processes that you should go and talk to the local loan officer and see what that particular bank offers. Get an idea, and then go to another bank and see what they have to offer. Diversify your knowledge. One bank may say that there isn't any likelihood that you'd get a loan with them, while the next bank will give you exorbitant interest rates, and the next one gives you everything you want and a scone. Don't settle after the first bank. Keep hunting down lenders. Do your homework, get proposals, understand where your credit stands (i.e., do you know what your credit score is?). 

There are plenty of loan options for investors who don't wish to reside in the rental, you just need to find the institutions that do such loans, and you also want to look into how they differ from other loans. Look into portfolio lenders. Look into mom-and-pop lenders. Local banks often don't have the high oversight and restrictions that nationwide institutions do. But they can be harder to gain that initial trust.

You're on the right path and I think that once you really delve into the realm of loans, once you get out and start talking to loan officers at various lending institutions, you'll quickly get a grasp on the vernacular and the concepts. You'll learn which loans will afford you the leniency that you desire and you'll learn which lending institutions are investor-friendly.