Hi Guys!
I’ve been reading this forum on and off for a while. Now I have an opinion question to ask. I’m relatively new to investing. My first investment was a 6 plex apartment, but I’ve been out of the field for a few months and I’m feeling overwhelmed and perplexed for what steps to take.
I have two homes that I am looking at for purchase. I live in an area where the selling market is extremely hot. Both houses are preforeclosures. One has an estimated 120K in equity; the other has 45K in equity. Both also are around 10K in reinstatement fees.
My financial situation. Beginning second year in self-employment so difficult to get standard loans. Also already own first home so difficult to get owner occupant loan. My equity runs as follows: own home has 80K (but has a 2nd mortgage already) and my apartment complex about 100K. Any suggestions of where to start. lease otion? subject to? Do I have enough equity to seek another loan type even with my self-empooyment? Any suggestions would be appreciated. Sometimes the challenge with real estate is that there are too many options, and for the beginner we can get paralyzed. Thanks.
I agree! There are many many options to choose from which can be overwhelming. If you are looking to get mortgages for you investment properties, then here are a few pointers…(to clarify, these are pointers for residential mortgages, not commercial…the 6-plex would be considered commercial).
Self-employment: This will probably lead you to having to do a stated income loan…although some investors may allow “lite doc” which would only require you to show one year tax returns from being self-employed. Expect a bit of an increase in rate as this is a step up in risk from going full doc.
Property type: If you already own one home as a primary residence, then you will qualify these other properties as investment properties. Again, expect a higher interest rate for these properties as they are a higher risk to an investor than a primary residence is.
Other factors you need to consider:
How does your credit look? Your score will be a large factor in qualifying for NOO Stated income loans (by the way…you can do a non-owner occ. stated income loan at 100%). Also, be forewarned that some investors will limit the amount of investment properties you can have with them. How are your assets? This is another factor that will play into what you can do. If all else fails, you could do a No Doc loan (No Income/No asset verification) if you are willing to put 10% or more down.
Hope some of that info is helpful…it’s really general, so if you have specific questions, I will do my best to clarify.
Good luck!