possible to get a loan for real estate investing starting out

Member since 2020 · 10 posts · 1 vote

This was recently on my mind lately about real estate investing I’m currently learning the ropes about real estate investing, I’ve been watching some videos about how to get started but some of the information seem to be sketchy and I’m wondering can you get a loan for a real estate property with good established credit without having to build another source of income like starting an online business in order to buy the property, any advice on this question

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JD MartinBusiness Member
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Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
6y
It sounds like you are asking if you can get a loan for all/most of the purchase. Depending on the purchase, your income and credit, the answer is yes. In my opinion easiest track to REI if you don't have any money is a duplex/triplex/quadplex with an FHA or VA loan. FHA will do 96% or thereabouts, VA will do 100%, both with some price limits. VA is only available to active military/veterans so if you don't have that background you should be looking at FHA. The reason to go duplex/triplex/quadplex is so that you have something to rent out, since FHA won't fund investment property, only a primary home (but anything up to 4 units can be a primary house). So you can live in one unit and rent the others out.
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Cody Barna
Real Estate Agent · Member since 2019 · 285 posts · 149 votes
6y
@Demari Williams If you plan on using traditional financing (ex. bank), they'll typically want to see at least 30-60 days of pay stubs if you're a W2 employee or around 2 years of tax returns as a 1099 individual, however these specifics can vary depending on the lender you use. Your credit score will also play a role in which type of loan you can qualify for, FHA is typically the most favorable for someone with a low credit score and a small down payment.
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Andrew Bonar
Member since 2020 · 22 posts · 8 votes
6y
Honestly Demari, you need to start out by reading a credible book. Too much nonsense out there in the world of videos. After you've read a credible book about investing in real estate use Bigger Pockets to help answer all the questions you have. Here's a couple books to help. (No, I don't like to read, but if you want to be successful this is a good starting point):
https://www.amazon.com/Brandon...
or
https://www.amazon.com/Buildin...
or
https://www.amazon.com/dp/0684...
To answer your question though, you can absolutely buy investment property with a mortgage loan. This is arguably the most common way investment property is purchased. Chances are you will have to use a conventional loan with a down payment of 20%. Hope this helps! Best of luck!
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David M.
Morris County, NJ · Member since 2020 · 5k+ posts · 2k+ votes
6y
@Demari Williams
Well it certainly helps t have established credit. But more importantly you need income. You need to show you can repay the loans. This isn’t like investing in stocks on margin...
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