All Forum Posts by: Shanna Pettie

I moved to California to take care of my mother during the pandemic, but I could give you some advise on any properties in the Jackson area which is where all of mine are located. I only have one multi-family property myself which I'm getting ready to put on the market. Unfortunately it will not go FHA because I don't think the back house was ever permitted. At least there is no record on it with the county land roll.  I get $1500-$1600 a month for it and I'm only asking 95K which is the value of the front house. I can recommend a good property manager/real estate agent for the Jackson area, though. 

Quote from @Shanna Pettie:

Quote from @Everett Stephens:

Leaning a bit into what Brandon said, I would start with your local community banks. We had a great start-up experience with a local community bank who could move faster with local decision making and good terms compared to large national banks (I use to work for one). The local banks also tend to be a bit more flexible with your equity requirements permitting you to be able to approach the 15% down mark. This will also depend on the obvious: Personal credit rating and available cash as your down payment. You will eventually get there if you're not already!  Good Luck!! 

Thank you so much Everett!!! Was your first property a SFR or multifamily?

Greetings Shanna -- I ended up with a line of credit that left me the flexibility to purchase whatever I wanted. I recommend you consider this. The decision to go SFR or Multifamily was strictly a matter of financial performance for me. We ended up with several SFRs initially before a multi-family became available that could financially perform at the level our SFRs were performing at. My point being is I encourage you to build a financial model that works for you that meets your business goals. Let your model be your objective decision maker for you. As such, you're able to keep your emotions out of the process. This has served us very well. We stick by our model and we're able remain financially healthy. The model may adjust over time as you learn more, but keep the core fundamentals in place to help you navigate your decisions. I'm pretty passionate about all I do, but I let my financial models and business goals do the decision making for my real estate investments. Hope this helps...Ev

Quote from @Shanna Pettie:

Hi everyone,

I would like to purchase some rental property in central MS and/or close to popular universities like Mississippi State or Ole Miss.  I'm currently saving for a down payment.  I'm interested in single family and multifamily (2-4 units); non-owner occupied.  Any recommendations for loan financing with a low down payment?   Which banks should be on my check list?

 Hi Shanna,

I typically see down payments for investment properties in the 20-25% range. You may be able to get away with 15% down on an investment SFR with conventional financing if you qualify and DTI is aligned. There also may be local credit unions/banks in the local area that you are searching in that may offer products with lower down payments for both SFRs and 2-4 units, but I wouldn't know. It may be worthwhile to check them out if your goal is to maximize your leverage and put as little down as possible. Are you strictly looking for conventional financing options? Or are you open to alternative financing to help expand your portfolio? Apart from conventional financing, you should know that there are many alternative financing options that a lot of brokers/lenders have to offer. These usually don't come with a super low down payment option, but come with other advantages that may be in your best interest. Many of them are actually discussed here in the forums. It'd be good to be knowledgeable of the different financing options you have available at your disposal. Best of luck to you! :)

I would recommend a DSCR loan (Debt Service Coverage Ratio). Most the investors I work with go this route. It doesn't require income documentation or tax returns from the investor (your income or debts are not considered) and can be closed in an LLC. Most lenders won't report on your personal credit. Long term or short term rent must cover the debt service of the property. For long term rentals lenders will order a 1007 report to verify long term monthly rent value based on comps in the area. As far as short term rentals go there a few lenders that will use a Airdna report or 12 months Vrbo / Airbnb history. Most these loans are at 80% Ltv, however pricing and rates are considerably better at 75% Ltv.

I hope this helps!

Leaning a bit into what Brandon said, I would start with your local community banks. We had a great start-up experience with a local community bank who could move faster with local decision making and good terms compared to large national banks (I use to work for one). The local banks also tend to be a bit more flexible with your equity requirements permitting you to be able to approach the 15% down mark. This will also depend on the obvious: Personal credit rating and available cash as your down payment. You will eventually get there if you're not already!  Good Luck!! 

If you are willing to live in one of the units, you can get an FHA loan with only 3% down because it will be considered owner occupied. Virtually any local bank or even credit union should finance it. I like Hope Credit Union myself because of their commitment to racial equity. I find it a good place to put my emergency funds as well because their checking account pays 3% interest on the first $10,000.

Hey Shanna! 

Do you own your primary? If so, would you consider doing a HELOC or Cash out to fund the rest of the down payment for the purchase loan? Typically most investment property lenders require 20% down