Lender Where I Live vs Lender Where I Plan on Investing?

[Jason Clayton]

Hello,

I am a first time investor looking to do conventional financing on buy and hold SFRs in an area where I can make the numbers work (unfortunately, I can't get the 2% rule near where I live).  Does anyone have recommendations on whether I should try to work with a lender where I live or in the market I will be buying?  I can see advantages to both.  For a lender where I live, I would be able to develop a closer, more trusting relationship, but a lender based in the area I will be investing will be more knowledgeable and comfortable with the deal.  

I assume this isn't the first time someone has asked this question, but I couldn't find it in the forums.  Any advice or a pointer in the right direction where to look would be appreciated. Thank you.

[Chrystal England]

I've done both scenarios for my financing needs.... My preference depends on the deal. If the subject property has some complexities associated with it, for example if it's located in a more remote area away from a major metropolitan area, then the path of least resistance can be a small local bank that is located in that small town. If the property is located in or near a major city, and you have stellar credit (700 FICO or better) and uncomplicated income (e.g. You are a W-2 wage earner, steady income and not self employed) then I've had good luck with Wells Fargo, B of A and US Bank in terms of great rates and good processing/approval times that allow me to close escrow quickly which can help you look more attractive to sellers. While SFD's are an easy first time investment, I find with buy and hold strategies that my multi-family properties (duplexes, 9 plexes and mobile home parks) far outperform my SFD's over time AND the commercial properties don't count towards the Fannie Mae 10 property maximum that can stop you dead in your tracks when trying to obtain optimal financing terms (lower interest rates, etc). In closing... I suggest trying out both big box banks, and small town banks until you find a good fit... It's like dating... Once you find a good fit, a lender who tells you yes more than no, then you can commit to a long term relationship.