Real estate investors need to understand that the rules today for borrowing money to mortgage your rental properties is different than it was a few short years ago. Here are some basics that you fully need to understand;
- Today the loan process is a full colonoscopy. I have lenders that find it difficult to find a way to loan money to an investor that can actually pay cash for the home. While this has been this way since the crash of ’08, it has gotten no better. You will need to have all your finances in order in order to get a mortgage loan on a non-owner occupied property.
- 99.999% of the time the lender is not going to loan you money in the name of your trust, “S” Corp or LLC. These entities are set up to protect you from liability. And that means from the lender. You, your personal home and income and etc, are going to have to be responsible for your next rental property if you are going through a lender. Just accept that.
- You need to work with a real estate agent that can anticipate what lenders will be asking for. They want leases, get them to them early. Make sure the leases are complete. Make sure you transfer certain assets on the settlement statement (the lender may fight you on this so attack it early) and be sure that personal property is nowhere on the contract.
There are many moving parts to a successful real estate investment property transaction. Educate yourself before you go in to your next one, prepare for the worst, hope for the best and just get the lender what he needs. Sooner or later the property will be in your possession and you can forget about all the little troubles you had to endure to get there.