Obtaining your first rental property can seem like an enormous undertaking. Finding the right Arizona Rental Property Loan is often the first obstacle to overcome.
You’ve probably read in the news about what a great time it is to get into the rental property business, a/k/a being a landlord. Now you need to figure out how to obtain mortgage financing to enter into being a landlord by purchasing your first rental property. Since the 2008 economic crisis, it is much harder to obtain financing; however, for people with good credit and income sufficient to support the mortgage payment, there is plenty of money to finance their project. If you are seeking a property to purchase and not live in, then this is considered non-owner occupied (NOO).
To improve your possibility of obtaining a Arizona Rental Property Loans to begin your landlord business, you may want to consider purchasing a rental property that also provides you with a home residence. This will require that you live in the property for a twelve-month period of time which will qualify you for an owner occupant (OO) loan. An owner- occupied property qualifies you for the best terms and, with FHA financing, you may be able to put down as little as 3.5%. When you are ready to make it a complete rental, then the original terms stay in place. This is the best option for you to start being a landlord.
Additional reasons this makes sense are:
· While residing in the property, you will find any problems that may not have been apparent upon inspection such as leaks.
· While residing in the property, you will be able to determine the upgrades and renovations that the property will need, and you are not burdened with two mortgage payments.
· As a landlord living in your investment property, you will be able to purchase a property with greater value.
If your desire is to just buy a rental property, then you will need 20% to 25% as a down payment for most Arizona Rental Property Loans. You will also need to pay for the closing costs and renovation costs. You will need approximately $40,000 cash for the purchase of a $120,000 property.
For a conventional mortgage, you will need good credit to qualify for financing. There is a chance that the lender may include rental income to help your debt-to- income ratios.
Today, the cost for mortgage loans is considerably higher than they were years ago. Even higher are the Arizona Rental Property Loans for non-owner-occupied properties. If you are seeking a loan which banks classify as a small loan, $100,000 or less, then the costs are considerably higher. These small loans could be 5% higher. You will then need to add in the additional costs such as origination fees, appraisal, underwriting, title insurance, and escrow costs. While these figures may seem a little overwhelming, the news is right: this is a very good time to become a landlord and invest in real estate for rentals. Educate yourself on ownership of rental properties, do your own due diligence, and call us at Level 4 Funding for a no-obligation quote.
Level 4 Funding LLC
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.
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