Financing for a $30,000 invesment property

[Drew Oberholtzer]

I'm purchasing a house for $29,000 and will be renting it for $800/month. It needs little work; just a fresh coat of paint and a new subfloor in the kitchen. I have cash on hand to purchase the house, but don't want $29,000 locked up as equity in the house. Most banks won't touch anything under $50,000. What are my options if I'd like to pull money out of the house for future investment properties. Also, is it better to purchase as an LLC or individual. I don't know very much about financing as an LLC, but would ultimately like to purchase properties under an LLC to protect myself. Any feedback would be appreciated.

[Dawn Anastasi]

I used Lending Club and Prosper to finance houses that were low cost.  You can get 3 or 5 year terms.  This is okay if you're doing just one and need cash in short term, but keep in mind you won't be getting mortgage prices.  The interest rates are higher and with the small period of time, your payments will be higher. The upside is that there is no lien on the property.

If you have the ability to do a refinance after a seasoning period, and the house is worth more than you paid for it, consider doing that and pulling out all your capital.

If you use a smaller credit union, some will bundle multiple small properties into one blanket loan.  Sometimes you have to call around to find a credit union near you that will do that.