What do banks need before they will give a loan?

[Issa Rice]

I was reading an article that banks look for at least 2 years experience from an investor. I wanted to know how true that is and how do new investors over come that hurdle. Besides the 20 or 25% down payment, what else do banks look for? Does it make more sense for a new investor to go through private funding over a bank?

[JD Martin]

Originally posted by @Issa Rice:

I was reading an article that banks look for at least 2 years experience from an investor. I wanted to know how true that is and how do new investors over come that hurdle. Besides the 20 or 25% down payment, what else do banks look for? Does it make more sense for a new investor to go through private funding over a bank?

 High levels of personal assets; good credit scores; high income to debt ratio; relatively high levels of "skin in the game" (i.e. down payment, personal equity); a property that can be successfully converted to a sale in the case of default. 

The way to overcome those hurdles is to start small, build a portfolio, and have something worth talking about before visiting the bank. $5k in hand, 2 car loans, and a minimum wage job is not going to inspire the bank's confidence that you can make this work.