Newbie here . . . financing process questions

Read cartloads of articles and books on rei strategy? Check
Put together a strategy for us to pursue? Check
Played with equations and developed spreadsheet for exploring leads? Check
Researched local areas and selected one to concentrate efforts? Check
Find a well-reviewed agent that specializes in reis? Check
Get financing? Well . . .

I’m in the preapproval stage now, before I go look at properties. I know my husband’s and my (excellent) credit scores, I have the W-2’s and last two years worth of taxes ready to send, yet it still seems really challenging to get basic information about loan terms and rates for investment properties so I can decide who I want to apply with. For loans on primary properties most lenders have a chart describing their products, but not on investment loan products. I have called 2 brokers, 2 online mortgage companies, and walked into a bank and been told ‘we’ll get back to you’ from ALL of them, except Quicken Loans. I might just go with them even if their rates are higher simply because they’ve had the best customer service!

So my questions are: Is this normal? Do these peeps really not have immediate access to what seems like basic product info.? Or is this a building relationships thing that will go smoother/faster on our next deal?

Just in case: Before people start discussing the merits of hard money lending over conventional financing I’d like to add that since this is our first deal and we’re learning we’re most comfortable in using our savings for the down payment and rehab of the buy and hold rental we’re hoping to acquire. We want to pursue a low risk start until we’ve developed some skill and experience in rei.

Thank you for your thoughts!

Some banks won’t lend on investment or Non-Owner Occupied (NOO) properties at all. Others won’t loan to LLCs. Others have minimum loan amounts (50k) for investment loans. You just have to keep trying. You can call around and find out who is lending on investment properties. Bank policies change. Someone who wasn’t lending on NOO properties 6 months ago may be doing it now.
If you find someone to go with, you can start to develop that relationship for future deals. Just be reasonable in your expectations and be prepared to fully lay out your financial picture for the bank.

Thanks Justin0419!

All the institutions I’m contacting say on their websites that they have loans for investment properties; it really seems like the loan reps should have at least a general idea relatively quickly of what their products, rates, terms are!

I think I’m just excited and impatient to make some progress on this. I’ve been thinking about going into real estate for years, and seriously researching, learning, formulating strategies for months, and after all this prep time and finally being on the brink of making my first purchase the lack of traction on this aspect was disappointing. Your counsel to be reasonable in my expectations is well received. I’ve waited this long, I can wait a couple more days! :slight_smile: