Getting a loan out of state?

Question

I’ve been saving my money and was wanting to invest it in long term rental properties. I live in CA but the property prices are too high for me to get started. I would like to start out by buying something around $100k with 20% down. Is that obtainable? Thanks!

Timothy Lewis · Answer

Very Obtainable! There are a lot of markets that will fit into your criteria. Check out:

Birmingham, Atlanta, Indianapolis, St Louis, Kansas City, Memphis, Little Rock, Indianapolis, Greenville, Jacksonville, Tampa, Houston, San Antonio, Little Rock, Milwaukee, Cincinnati, Dayton, Cleveland, Ohio, or other secondary or tertiary markets.

Mitch Smith · Answer

@Steven Ciccone

Hey Steven. Your numbers are definitely obtainable. Just for full transparency. I am not a lender, however I have a couple of really good connections with a couple of them that I trust and and use regularly. I would be happy to pass along their info if you are interested. Feel free to hit me up and I can share the information with you.

Good luck.

Mitch

Chris Wharton · Answer

@Steven Ciccone are you looking for a SFR or a 2-4 unit? You could put as little as 15% down on a SFR. Agency requirements are 25% for anything 2-4 units. Let me know if you'd like me to run any scenarios.

Remington Lyman · Answer

I think you will need to put 25% down. I know some lenders in Columbus, Ohio that you can chat with.

@Chris Wharton can you opine on this?

Steven Foster Wilson · Answer

Ive built up some really good relationships with some local lenders who do investor loans for OOS people.Not to mention Columbus is one of the best spots to invest, especially coming from California.

Andrew Weiner · Answer

What your looking for is theoretically possible but keep in mind that there are other costs.  You could be looking at 5k + in closing costs just to get the property.  Also you will need some money for initial repairs, possible initial vacancy, and general reserves.  If the property looks really clean then ~5k in reserves would be sensible.  You won’t have any equity in the home to use in case of emergency for a few years so you need to have the funds to cover the unexpected.

Last thing is that most lenders I have spoken to are at 25% down on rental homes right now.  If you have someone at 20% let me know.

J. Mitchell Bernier · Answer

@Steven Ciccone Yes that is definitely doable. Focus on the southeast and Midwest and in about every market worth investing is plenty of potential deals out there.

Brock Mogensen · Answer

Milwaukee is a great cashflow market but at $100K you will probably fall into the C class space.  If you are going to target a deal like that I would make sure to connect with a good PM before buying a deal.  Managing properties in rougher areas requires a good boots on the ground connection.

Zeke Liston · Answer

Yes, very possible. Columbus, OH has a lot of great opportunities. The market has great population and economic growth as well, which is great for my properties.

Kerry Noble Jr · Answer

definitely obtainable in Central indiana

Getting a loan out of state?

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