Why the banks wont lend for the war zone properties in Rochester

[Raju T.]

Why the banks wont lend for the war zone properties in Rochester?

There are lot of properties in rochester with a good cashflow but I heard that banks wont lend not even 70% of LTV. Any information helps alot.

thanks

[Steve Santacroce]

They legally cannot deny a loan for a property in a given area, that is an illegal practice called redlining. However, they can set a minimum amount they are willing to finance (Usually around 50k) and since most of those properties fall under that, they can get away with loaning out money to them. 

Now as to why? Because they are bad areas to own property in! I know a few wholesalers who've wholesaled the same house multiple times! Investors ignore the warning signs, only see the $$$$ and buy properties that are very hard to find good tenants. Good tenants don't want to live in those areas. Section 8 & DSS will pay for them to live in better areas, so the really run down streets are usually all cash tenants. 

I would look at what the banks are saying as good advice. Stick to areas that you can get a mortgage on a house, you'll end up making more money in the long term, and you'll have far fewer headaches!