Anderson Business Advisors Podcast

Financing Secrets For Successful Investors

September 3, 2019

The exciting part of investing in real estate is finding a property and running the numbers. If you don't have financing ready to go, the property will probably be sold to someone else. How do you get financing for your rental properties? Today, Michael Bowman of Anderson Business Advisors and Bowman's Business Brief talks to Todd Bowman of AmeriFirst Financial about financing options. Todd is a mortgage broker, who handles mortgages for investors with rental properties.

Highlights/Topics: 

  • What’s needed to qualify for an investment property loan? Pre-approved financing, two years of tax returns, and paycheck stubs to verify income
  • What type of pre-approval? Full-underwrite approval, instead of credit approval based on your credit score
  • How much of a down payment is recommended or required by lenders? 20 percent for investment properties, but some require only 10 percent for hard money loans
  • What are down payment qualifications? Your money only; or money gifted to you needs to be in your bank account 60 days prior
  • Do seller concessions factor into loans? Reduces out-of-pocket and closing costs; AmeriFirst’s $1,450 processing and underwriting fee includes six months of taxes and hazard insurance
  • What if you don’t have enough for a down payment? Use cash reserves from 401(k), IRA, or stocks and bonds portfolio 
  • What if you buy a property already being leased out? Take 25 percent of rent based on market rolls for instant income stream
  • Is it a cash cow, mailbox money, or dog of a property? Numbers don't lie; make sure it's profitable 
  • What’s an acceptable credit score? It isn't one particular number, but more about your credit profile; better FICO scores mean cheaper rates and likelihood of approval
  • How can you improve your credit score? Revolve credit lines/cards, lower balances, and don’t randomly pay off loans/debts
  • What's debt-to-income (DTI)? Based on your total debt, including credit cards, student loans, and child/spousal support 
  • What should you look at or make sure of before making an offer on a property? Do your research by driving around the neighborhood and interviewing realtors 

Resources

Todd Bowman

Zillow

Trulia

FICO

Michael Bowman

Anderson Advisors

Anderson Advisors Tax and Asset Protection Event

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