How to Get Financing to Buy a Rental Property

There has been a lot of hype over the rental property market. Everything has been indicating that there’s money to be made on these properties, but when compared to traditional methods, renting out homes is a unique form of real-estate investment. Discover how to get financing to buy a rental property and what your options are.

When looking for funding for purchasing rental properties, there are a number of options out there. Choosing the right one can have a major impact on the success of your investment. Pick the wrong lender and you can end up bleeding more money than necessary, thus draining your investment.

In any case, you will want a lender that you can trust as many real-estate investors in rental properties look for financiers to work with long term. Rentals have enormous potential for growth, and after you turn a profit, you can always come back to finance another property.

Getting a loan from the person who is selling the property to you can be an option. If the seller is willing, they can finance either the down payment or the full price. This will also be less paperwork for both you and the seller, but it’s crucial that the terms of the loan are in writing with signatures. If you don't have experience with this, you may want to hire a CPA or attorney to review the terms as the seller will most likely be a property investor or the live-in owner.

Another great way to get financing for your rental property is to partner with someone who has enough for the down payment. Possibly a friend or family member who is interested in investing, but doesn't want the hassle of going through tenants and collecting the rent.

Usually, in these types of agreements, one party pays the money for the property and the other handles the day-to-day operations. The last thing to figure out will be how to split the income. Make sure you have the agreement in writing and signed by both parties.

Having a lawyer service will make this process faster and easier than a full attorney, and you can also put together an LLC to help make it even smoother.

With the help of the Federal Housing Administration (FHA), you can get a home with 3.5% down, instead of crazy rates from banks or other lenders. With these loans, you can buy owner-occupied homes like purchasing two to four-unit buildings, living in one of the units, and earning the rental income from the others.

Money saved aside from employment in an IRA can be used to finance buying rental properties. If you choose this, talk with your CPA first, before giving the money over. Make sure you're completely ready to put the time and effort into this type of investment.

It’s hard to sell the idea of making a profit off of a rental property loan to a bank. All in all, banks just don’t like rental arrangements. In a bank’s eyes, almost any rental property proposal will look like a big pile of risk.

Fret not, there are plenty of other options out there, and it’s better to have the forewarning before wasting days of your precious time trying to work with a bank.

Vacation rentals are all the rage these days. There’s plenty of money to go around in this market and with a little capital from Vacation Rental Property Loans, you can get your own slice of the pie.

Short Term Vacation Rental Financing is perfectly designed for purchasing vacation rental properties. These loans are amortized, 30-year loans with a fixed rate, and have no balloon payments to worry about. 

Another way to get in on rental income is in multifamily housing. These are specially designed loans available for multifamily housing investments. Loans range from 3, 5, 7, or 10 years in duration. They feature LTVs up to 75% and 1.0 – 1.2x DSCR.

Investors can receive financing under multifamily blanket loans for the following property types:

• Apartment building communities five units and up
• Senior living facilities
• Assisted living facilities
• Student housing
• Mixed-use properties

However you decide to finance, make sure you have the correct paperwork to help you succeed, documents like:

• Formally written agreements with the seller lending you money
• LLC agreement on who does what with partnerships
• List of projections on returns from investments from your financial planner

Vacation Rental Property Loans is the premier choice for rental property acquisitions. Known for integrity and flexibility, we can offer you some of the best deals on loans for buying rental properties.

Unlike banks and other hard money lenders, we don’t require pesky details like tax returns. As long as you have a credit score of around 600, we’ll work with you. Filed for bankruptcy in the past? As long as it’s been at least 2 years since your bankruptcy spell, we have a deal for you.

Check out Vacation Rental Property Loans on the double, and get the funds you need to purchase a rental property that will put money in your pocket for years to come!