Financing and just starting out - would LOVE your opinions if it's possible!!!

I have the wonderful opportunity to invest in real estate. And i’m terrified!! LOL.

I already have a rental me and my wife are selling in California. We will have a lump some of money. I want to reinvest that money back into real estate that will make much more money for alot less investment.

a few questions i have are:

I have a credit rating of 725 and 690 (two different companies).
What do you think will be my cut off point (total amount borrowed). Just a guess…?

My wife would like to buy a ‘retirement’ place in Colorado Springs area and i was wondering should i take the proceeds and pay off the retirement land and what’s left over use to invest… or would it be better to invest it all and take the proceeds from the new investments to use towards the Colorado place for us?

my biggest question… We will have about 400,000. Is it better to invest in alot of small properties, or a few or just one really big one? I see that the larger properties have ALOT more cashflow than the smaller ones. I’m kind of leaning towards buy as much as i can afford… One thing i also like about buying a LARGE property is that the vacancies really don’t affect you as much with a large number of units like small places do. What do you guys think???

I have no proof of income right now. ME and my wife just became Realtors - we both took a year and a half off before we got our real estate licences. So there’s no proof of any inoming money other than the money we made selling our other rental last year. I am kind of worried about Financing on THAT part. :frowning: Please tell me there’s still hope!!!

I really want to do out of state investments, they show much better return than anything i have found in california. My wife REALLY wants them to be close to home so we can tell what’s going on with them.
Help me convince her we can just jump on a plane at anytime and find out while keeping it with a property manager. Do you think that it’s a good idea for property management?

What amount of down would you guys suggest… I see alot of 20% downs, but, if i buy one more over 1,000,000 dollar property i wouldnt be able to buy more than one property (depending on the price). What do you guys think, how do you do it?

Lastly… Thank you all so much in advance… Not on just replying to this post but every other one i have read. I have learned so much from you all, thank you!

  • Jason in California ;D ;D

If you going “stated” or “No income disclosure” on a commercial loan under 1.5 mil. and you don’t want the lenders interest rate to eat up all your cash flow you should put down 25%.

IMHO when it comes to buy and hold properties commercial units are a much better investment.

Thank you soooo much!! Those are exactly the responses i wanted, the honest opinions from people that have made it work!!! I really do appreciate it.

Lenders are going to give you the best rates in these markets:

Connecticut: Southern Connecticut
Florida: Miami, Ft. Lauderdale, Tampa and Orlando Markets
Illinois: Chicago Metro
Maryland: Baltimore Metro, Montgomery and Prince George Counties
Massachusetts: Boston and Worcester Markets
New Hampshire: Southern New Hampshire
New Jersey
New York: New York Metro
Pennsylvania: Philadelphia Market
Rhode Island: Providence County
Virginia: Arlington and Fairfax Counties, Alexandria City
Washington DC

Try and stay away from the markets that have been overheated. You can go to to get an idea of what rates of return are available in these markets.

If the property is close to your residence and the number of units is under say 20 you may want to manage the property yourself. Otherwise, a good property manager is invaluable.

Well, you’re obviously very excited and that’s a good thing. The previous answers are all insightful and good advice. You’ve asked quite a bit of questions here so I’m just going to give you a few things to contemplate.

  1. Credit rating dictates LTV not necessarily loan amount. Loan amount is based on income more specifically and/or bank statements, which you should be okay with in the near future.
  2. Property management is very dangerous when dealing outside of your proximity. So, unless you have someone close to the property or elect to go with a commercial property, I’d advise against it.
  3. Since you’re receiving a lump sum of money and filled with excitement, I suggest you start with a residential “flip” or investment. ALL investors make mistakes and not just in the beginning. It’s wise to try and minimize those mistakes until you feel more confident in what you’re doing. Take that energy and channel it toward knowledge, research and action. You don’t want your first mistake to be so costly that it prohibits you from pursuing other ventures or inhibits your freedom to act on other opportunities.

Get your feet wet and then go swimming. Good Luck!


I just wanted to thank each and everyone of you guys. The knowledge you have shared is invaluable, it really is a gift you all have shared thank you so much.

I cant WAIT to get these tenants out so i can put a stake in the yard and get this house gone :stuck_out_tongue:

We gave them every opportunity to call and work soemthing out, but, they dodged our calls and wouldnt answer the door, i’m looking forward to making much more than 1200 dollars a month on a house that’s worth over 500k.

What a great change this will be!!!

Thanks guys

Sorry, but not to get too offtopic in this thread, but is there any particular reason you named those markets? Or more bluntly, why?

I’ve been looking at some more obvious stats such as Nevada, and Arizona, but don’t see neither of them listed. Is there any reason why they are not? ???

The posted was looking for a “stated” or “no doc” product. The investor that fits that niche prefers those markets. The prefrence could be for any number of reasons.

  1. Those markets have a low default rate on commercial mortgages.
  2. They have a large amount of mortgages in their portfolio from other areas and not enough in the target markets.
  3. …Just because.

As I said, that is one particular investor for one particular niche. Generally, commercial lenders will offer financing in any “active” market…i.e, marketing time is not 2+ years, etc.