Out of state financing options

[Sinead MacFhionnlaoich]

Hi! I’m a relatively new investor. I own a single family home that I purchased as a primary residence two years ago. I rent out a portion of that home for more than my mortgage and I’m planning on fully renting the property in the next six months. I live in an expensive area and I’ve been looking at purchasing a 2-6 unit multi family property out of state. I’m planning on putting down 20-25%. What financing companies should I be looking at and what kind of loans could I use?

[Mike D'Arrigo]

@Sinead MacFhionnlaoich For 2-4 units, you can do conventional financing, however, you will need 25% down. If you're buying for a long term hold, which you really should be, you should do 30 year fixed rate financing. You're mortgage payment will be your largest single expense. By locking in a fixed rate mortgage rate, the majority of your expenses will never increase over the life of the investment. On anything over 4 units, you will have to use commercial financing. Most commercial loans are fixed for 5 years and then renegotiated after that.