(480) 889-6100 BK-0917799  |  NMLS# 396288

Financing Your Real Estate Investment Property

Financing Your Real Estate Investment Property

Real estate is an overwhelmingly stable investment that retains its value and appreciates over time. You can get amazing tax advantages, an outstanding rate of returns, and even leverage your property to build wealth. But like every other business, you could earn a good chunk of money or experience a total loss. To be on the winning side, here are some of the things to consider when buying an investment property.

Be Prepared for the Challenges

Being a first-time landlord comes with a lot of challenges as you learn the ins and outs of the industry. It’s like another part-time job. Also, before the rent checks start rolling in, you may have to deal with unexpected repairs. As such, you need to know your way around the toolbox and how to handle minor repairs.

Secure a Down Payment

The down payment required for investment property loans is typically larger than for owner-occupied properties. The three percent you put down on your house isn’t going to work in this case. Mortgage insurance isn’t available for investment properties, and you will need at least 15-20 percent down payment to get financing. You can even get a better rate by putting more down.

Determine Your Niche

Focus on a real estate investing strategy. Are you looking to buy rentals, fix and flip properties, or invest in notes? Find out which real estate niches you can venture in and study the inventory in the market. For instance, you can decide to invest in single-family houses, small multifamily units, or college student rentals; whatever makes the most sense to you. Go for properties located in nice neighborhoods and in proximity to a wide range of amenities.

Calculate Expenses and Profits

Start with having your finances in order and determine what you already have and what you’ll borrow. Then calculate the amount that would go into the purchase, renovation, and maintenance. Finally, estimate the price you’re going to list your property for and your projected ROI.

Get a Low-Cost Property

Buying a larger property than you can handle is not a good idea. Remember, you’ll need to pay more for renovation before renting or selling the property. Start small and go for properties that lie in the lower-to-mid range price range. For instance, purchasing a single condo or apartment can help you get grounded in the real estate industry as you figure out whether this type of investment is really for you.

Choosing the right commercial property loan could make a positive difference to your financial situation. At Capital Fund 1, we’re hard money lenders committed to making real estate investment financing in Arizona as seamless as can be. Contact us to learn more.

Leave a Reply

Contact Us

Find Us

  • 14555 N Scottsdale Rd #200
    Scottsdale, AZ 85254
  • Phone: 480.889.6100
  • Fax: 480.361.8628
  • Hours: Mon-Fri 8am-5pm

Latest Posts

  • Vacation Seasons for Rentals in Arizona
    Vacation Seasons for Rentals in Arizona
    There is a reason why terms such as “Tourist Season” and “Snowbird Season” exist in Arizona, and that is because these vary from different times throughout the year. However, unlike a typical summer, fall, winter, spring type of season, these will actually be different depending on the...
    Read more
  • How To Find Fixer Upper Houses
    How To Find Fixer Upper Houses in Your Area
    Finding a fixer-upper isn’t always easy work, in fact, it can be pretty difficult sometimes, or if you are just starting out in the real estate investing game you might not know where to start.  To help you on your search for your next investment, here are...
    Read more