All Forum Posts by: Lin Yin

@Lin Yin 

Yes, you can do cash out financing with traditional Fannie Mae conventional financing (available at most banks) on rentals, but there's limitations: 

• You'll only be able to cash out max 65% to 80% of the value in most cases with conventional financing in that price range. 
• You'll need to have owned the property at least six months before you receive the cash in hand from the cash out financing. 
• Some lenders may limit you to four financed properties only. In other words, if you've already financed four (including your primary residence), they may not issue you additional loans on investment properties (this limit doesn't apply if you're financing a primary home). You'll need to find a lender that will lend up to the Fannie Mae limit of ten - but you may have additional restrictions on loans 5 through 10. 
• Make sure you have adequate reserves. The lender will want you to document at least six months worth of taxes, insurance, mortgage insurance (where applicable), HOA fees (where applicable) and principal and interest payments for each financed rental.
• You may not be able to qualify using the rental income until it's showing up on your filed tax returns, so you'll need to be able to qualify with what other income you have. 
• You need to have good credit scores - ideally 740 or above for the middle of the three scores from each major bureau. If your scores are a little lower, you can still potentially get the deals done, but the pricing won't be as good. 

Hope this helps!

Putting down 20 to 25% on properties within Boston and still having cash flow is quite difficult, despite the high rents. Familiarize yourself with all the BP equations and look hard for that first property. For instance there is a property in Brighton 2 br/ 1 ba 760 sq ft listed for 299K. Might rent for 1700 to 2200. But taxes are 2500 and HOA is 500/mo. You are looking at a 2k note with minimal possible cash flow. But if you look at places not in the city you might be able to cash flow better. Good luck