must i be rich?! must i have a large down payment? what are some things to watch out for? whats a good deal? whats a bad deal? what are some do's and dont's? the more info, the better. thank you.
2007-02-06 18:02:47 · 6 answers · asked by not who i appear to be 1 in Business & Finance ➔ Renting & Real Estate
No you don't have to be rich to purchase an apartment complex. I suggest that since you are interested in buying investment property start with a 4 unit apartment. This way you will have 3 others assisting in making your monthly mortgage payment.
Any 1-4 unit is considered almost like a single family house. if you live in one of the units it is considered an owner occupied property and have the same benefits as if you were purchasing a single family home.
If your credit scores are sufficent you may qualify for a 100% loan.
All banks just about offer the same products and loan programs with the different qualifications in each of their programs.
Your interest rate is based on your credit score and how well you have paid your consumer debt over time.
In order to find out the type of loan programs you are qualified for you will have to fill out a loan application, with a mortgage broker, which you can find one in your local telephone book.
He will fill out this application, which takes awhile so grab your favorite beverage and sit down. Once you have completed the application, he will run your credit report which will have your credit scores. These credit scores will determine your interest rate.
The amount of your monthly debt payments you are required to pay as per your credit report and the amount of mortgage you can take on based on your income will determine the amount of house you will be able to purchase.
When you speak with the mortgage broker you will need the following documents to complete the loan application
#1 One month of pay stubs for each person that will be on the mortgage.
#2 Six months bank statements from each bank in which you bank as well as statements from any 401K from you place of employment.
#3 Two years of federal income tax along with the W-2 that match.
Once he has all that he need to do he can then issue you a pre-approval letter so you can purchase a home.
In this pre-approval letter will be the amount of house you are qualified to purchased.
Once he gives you this pre-approval you may now find a real estate agent to find yourself a home or he might have a referral.
Once you have found a home the real estate agent will then prepare a contract for you and the seller to sign.
Your mortgage broker will now order an appraisal to show proof of the property value.
The mortgage broker might ask for additional information or documentation, don't get all up tight this is normal, just supply the information or find the documents needed.
After the appraisal has been completed you will be called by your mortgage broker to sign your loan docs so you can take possession of your new home.
Now since you will encounter tenants in your new place, you will need to know about tenant and land lord rights for your local area.
Find the Apartment House Association in your city and join. These are the guys that can get you off and running with being a great land lord as well as the do's and don't of the business.
The can also help you with obtaining credit reports for your future tenants or they will be able to point you in the direction of an agency that will do them for you.
They will also have the necessary rental forms for you to use and other legal type documents that you will need.
They have monthly meetings as well as a monthly magazine covering the local topics you will need to learn. They might also have a little legal advice under certain circumstances.
This will not be easy, but anything we attempt to do is now really easy now is it? But you will learn and be better off for the experience.
I hope this has been of some use to you, good luck
"FIGHT ON"
2007-02-06 18:37:55 · answer #1 · answered by Skip 6 · 0⤊ 0⤋
If you crunch the numbers, it usually turns out that you do have to have a large downpayment, to have positive cashflow.
sure you can get a loan for the place, but you have to calculate if you will have enough revenue from the rents to pay the mortgage, insurance, taxes, maintenance + upkeep, and have a few bucks left over.
You also want to get a place with as many "good" tenants as possible.
You should buy the book landlording for dummies available at any large bookstore.
2007-02-07 01:27:43 · answer #2 · answered by gary d 3 · 0⤊ 0⤋
Skip gives sound advice. the only thing I would add is to find yourself a good team to work with. Your team should consist of a Certified Mortgage Planner that specializes in investments, along with a great Financial Planner. You should seek the counsel of these two before you look at a Realtor. They will take a look at your financial picture and work to offer the best solutions for your needs. To find a CMP in your area: http://www.cmpsinstitute.org/public/menu
Good luck... BTW: I'm not a CMP, but I work with one. I have several investments and the information has been invaluable
2007-02-06 19:11:45 · answer #3 · answered by Anonymous · 0⤊ 0⤋
You really need to check in with a real estate agent for all your questions. You need cash or the ability to secure loans from banks, and the fortitude to be a landlord and deal with some of the unsavory people you will probably meet up with (renters). Check with an RE agent.
2007-02-06 18:28:42 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Get a Realtor to help you. On a purchase this major you want the help of a professional.
RE Agent,
Remax
2007-02-07 01:36:09 · answer #5 · answered by frankie b 5 · 0⤊ 0⤋
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2016-09-28 13:05:25 · answer #6 · answered by ? 4 · 0⤊ 0⤋