- Why Midland
- Review Us
Are you a first-time real estate investor and unsure of where to begin? What you need is some basic information to help you get started. We’ve put together a few tips. Here’s a short guide on how to find the right investment properties for sale– for beginners.
The first step to reaching your financial goals is to search through the right kind of investment properties for sale. Most people consider residential for rental property when they think of investing in real estate, but commercial property is also an option. Renting a place to live vs. renting a place to do business is the difference. Still, commercial real estate investments are more complex, so you might want to start this investment journey with a residential rental property.
Two of the most common loan types to purchase a rental property are a conventional loan and a home equity loan. Both loans consider your credit score, debt, income, credit history, and assets for approval. If you already have a mortgage on your primary residence, you may need to have a certain amount of cash available to cover both mortgages for at least six months as a prerequisite to qualifying for the loan. For a home equity loan, you’ll use the equity in your home to secure the loan for the investment property.
With a conventional loan on a rental unit, a lender may require anywhere from 20-30% down payment. The large amount helps you secure a loan on a mortgage on the rental property that has a lower risk for the lender, but it can also help you get lower interest rates. If you don’t have the necessary cash available, you can use gifted funds for the down payment, but you’ll need documentation to go with it. Your mortgage lender can help you with this.
If you’re ready to jump on the investment property bandwagon to create a new income stream, we’re here to help. Contact the knowledgeable professionals at Midland Mortgage Corporation for your free consultation.