Rental Properties for beginners

[Christina Gray]

Ready to invest in rental property in upstate ny, but I am having a hard time finding a bank willing to mortgage the property. Any suggestions/ advice? did anyone experience this? if so, how did you overcome this obstacle. 

Any advice in general for beginners investing in rental properties? 

[Shera Gregory]

You should be talking with smaller local banks, not the national ones. The smaller banks usually keep their loans in-house so they can make up their own rules about what they want to see in a borrower and in the property. When you go to the larger banks they will be selling their loans very soon so they have to abide by the guidelines set by Fannie Mae and Freddie Mac. A local credit union can also be a good option. They will work with you on what is necessary to get your credit where it needs to be. The reason some folks are recommending hard money or private money is that those lenders are more focused on the property vs you as a borrower. However, you will likely still have to provide a personal guarantee for the loan so your credit is still an important consideration. Have you asked about how much they want you to have as a down-payment? If that takes up every penny of what you can put into the rental be careful because you will need funds to handle maintenance, utilities during vacancy, and possibly larger ticket items when things need to be replaced. You can look for deals that are offering seller financing but be sure to check the value so that you are not overpaying by much for the ease of not having to go to the bank for money.