Relocating from LA to Nashville, loan options for primary home?

Question

Currently live in Los Angeles and gearing up to relocate to Nashville early next year. We will be selling our primary home here and purchasing a new home around Feb/March next year.

We should hopefully net $700-800K from our primary and are looking at homes in the $3.5-4M range in Nashville. Would like to hopefully purchase another investment property with the sales proceeds around the same time as the move. Question is, is there 10% Jumbo loans for that amount and use the remainder for the investment property, or maybe use an AIO loan , other options I'm not thinking of?

Looking to maximize the net proceeds and hopefully pick up our dream property and add a cash flowing property to the mix at the same time.

Would really appreciate feedback of the best way to achieve hopefully both homes and different strategies for primary loans in todays current climate. TIA!

David VanWert · Answer

Thanks @Luka Milicevic would love some intros to some of the better options in Nashville for primarys if you are open to that.

David VanWert · Answer

Would love some local recommendations!

Luka Milicevic · Answer

@David VanWert

Firstly, I recommend using local lenders for both your primary and future investment properties. I've had several of my out of state investors use their own lenders that were out of state and they always seem to run into issues! (delayed closings, deals falling apart, etc)

You might have to have two separate lenders for what you are trying to do - one for the primary and another for the investment properties. Some lenders will give you excellent products on primaries and absolutely terrible terms on everything else.

My best advice is going to be to SHOP lenders. Talk to a bunch. Get their rates and terms and see what works best for you.

When it comes to your primary, you might be well suited to work with a mortgage broker that can shop around for you and get you the best deal. When it comes to your investment property, mortgage brokers are going to be no good. You have to go with a portfolio lender. They will give you by far a better product.

I'm closing a refinance on a rental tomorrow and I'll give you a quick run down of what I ran into over the past 2 months trying to get this done.

My two primary lenders that I've done many deals with over the past few years are not doing any new loans on investment properties for the time being. I was mid refinance with one of them and they emailed me saying that the bank decided they can't proceed with my loan due to a change in their risk policy - no more investment loans!

I spoke to every lender and mortgage broker in the area. I was running into a combination of ridiculously high rates, EXTREMELY high closing costs or a very low LTV. I finally found a lender that had very decent rates, low closing costs and a full 80% LTV. It's a newer local bank that is ambitious about expanding quickly.

It's a bit of a tricky situation right now with investment property financing but that's the great thing with the current times....if you can be creative and put in the work there are tons of opportunities.

Allan Smith · Answer

You could start talking to lenders on what they expect. I know a few if you need one.