Hello. It seems as though investor financing on non-owner occupieds is at a higher rate than on a standard loan you would buy on your own home.
My question is how am I able to cash flow on these properties when the loan rate higher? I don’t think I can charge rents high enough to cover these loan rates. Any thoughts from people who’ve overcome this?
-Sonriffic
You have to buy at a large enough discount that you don’t run into this problem. Another solution is to put money down. Lately it seems as if 90% is the sweet spot where the rates drop off.
There are number of ways to increase cash flow and Chris has covered some of them; here they are:
- Buy at a bargain price
- Lower your interest rate
- Extend amortization period
- Increase down payment
Regards,
Scott Miller