All Forum Posts by: Eric T.

Thank you @Guifre Mora! I'm curious to know what most investor's preferences are in terms of when to submit the loan application. I would think that submitting it prior to the seller accepting your offer would be more time efficient. At the same time, you risk applying for a loan when the seller could end up declining your offer. 

At what point do you submit your application for a mortgage? Is it after you put in an offer for a property (but before the seller accepts it)? Or do you wait to apply for the mortgage after your offer's accepted?

I've been reading about the process of submitting an offer on a deal and all of the things that go on throughout that process. I'm a bit confused on the timeline for getting a conventional loan approved. At what point do you submit your application for a mortgage? Is it after you put in an offer for the property (but before the seller accepts it)? Or do you wait to apply for the mortgage after your offer's accepted? 

Thank you all for the responses. It sounds like most investors prefer to put in an offer before visiting the property. That makes sense since you have the opportunity to inspect the property later and put in a contingency to back out if something is awry after the inspection. 

What if the property is located in an area that you are not familiar with though? Do most investors usually still put in an offer in this case? Or do you typically only look for deals in areas you are familiar with? 

I'm new to REI, and it sounds like finding deals is a very competitive process. For investors who find deals through the MLS, how many of you visit a property before putting in an offer? Or do you just submit an offer before even touring the property?

@Casey Mericle Thanks for the response, and your points make sense. Still, I like the idea of a conventional loan just because I feel that it's one of the most reliable financing methods (in terms of being able to count on the bank to provide payment once the loan's approved). I have no rental properties of my own and am just learning about REI. As a newcomer, I'd be nervous working with a private lender because it seems more open-ended to me. I imagine that you'd really need to do your due diligence to learn what you can about this lender in order to form a trustworthy relationship with him/her. So it's too bad that conventional loans tend to have the downside of taking more time to be approved.

I understand that one of the advantages to paying all cash for a property is the fact that you don't have to go through the process of acquiring a loan. It can take weeks to be approved for a loan, and some sellers don't want to have to wait that long in order to get their property.

I have two questions:

1) In the seller's point of view, how important is it for the buyer to want to pay all cash for a property? Is it generally preferable to a seller that the property be purchased in all cash? I'm trying to get a better idea of how much of an edge is given to investors willing to pay all cash versus those who do not. 

2) For experienced REI's out there, I've love to hear any stories you have about challenges you've faced when getting a loan. How much of a bottleneck/inconvenience has it been for you to go through the lending process? Has it kept you from securing deals in the past?

@Evan Polaski @Joseph Cacciapaglia @Asim Sheikh Thank you for your responses! I have definitely heard the "location, location, location" mantra many times. But I know how important cash flow is, so I appreciate the feedback on how the two are essential components to a good deal. 

Let's say that you're a buy-and-hold investor and you analyze a deal where the numbers work out great. The cash-on-cash ROI is >10% and the cash flow is >$200 a month.

Given these numbers, how much would the location of the property weigh into your final decision of taking the deal? One consideration I'm aware of is what class the neighborhood is. If it's a D neighborhood, I'd probably think twice on the deal. But aside from that, how else could location affect your decision?

What factors should be considered when deciding whether to use a rent-by-room strategy for an SFR or just renting the whole property out to a single tenant/family? Also, how does the location of the property play into this decision (if it does at all)?

Thanks!