Hi all! I just graduated from college and am now employed at a big tech company in an engineering role. I’m interested in beginning to invest in real estate, but I’m not sure if I’ll qualify for a mortgage.
More concretely, I’m interested in financing for an investment property that I will not live in. This will be my first real estate purchase. I’ve read that it’s possible for new grads to get loans for a primary residence but haven’t found if that’s true for investment properties.
I understand that to get a real answer, I’d need to provide more details about my financial situation, so I’m really looking for guidance on who to reach out to who can better answer this if I provide those details to them. I’m under the assumption that shopping around for mortgages (i.e. applying for them) will impact my credit score negatively, so I’m trying to get as much info as possible before I have to do that.
If it makes any difference, I live on the west coast and am looking at investing in the Midwest.
Lender · Costa Mesa, CA · Member since 2018 · 337 posts · 245 votes
7y
@Jake Beauchamp your age should have zero to do with RE Investing. your experience, however, may play a role in the rates/ terms you qualify for. As will your credit score.
since you're looking to do investment properties, the biggest hurdle will be coming up with the down payment. investment properties typically require more down. the benefit, however, is that you don't always need to "qualify" for the loan based on your income. Many lenders who specialize in investment-funding will qualify the property itself based on the cash-flow it brings in, as opposed to your personal income and DTI.
What that means is, they look at the rents received on the property up against the cost to own the property (the mortgage debt, the taxes, insurance, maintenance/repairs , etc.) -- if the property cash-flows positive (there is some criteria with this), you should be able to obtain a loan without even providing tax returns and such.
I will offer a disclaimer: rates and terms will be significantly better if you CAN qualify with income. but it's not mandatory for what you're trying to do.