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Wednesday, 23 September 2015 05:00

Business loans for rental property – Is it a smart move in todays market?

Business loans for rental property – Is it a smart move in todays market?

business loans for rental propertyPricing on homes are on the increase and intrest rates remain low, does that mean we should buy, sell, and or hold on new investments? The quick answer is YES, be smart and you can do well with your rental home loans.

Low interest rates are attracting buyers to rental real estate and prime locations are being purchased quickly making prices rise in desireable areas. 85% of metro areas have seen a rise in single-family home prices in the first quarter of 2015 with predictions of continued growth in America. - source: National Association of Realtors.

Although interest rates remain low, financing is not as easy as it used to be; tightened credit requirements are making it more challenging to secure loans for investment properties. However, with the right preparation and information, getting business loans for rental property can be eaiser than anticipated.

Down payment – Go Big!

An average of at least 20% down is usually required in traditional financing to aquire business loans for rental property. However, to improve cash flow real estate investing, a higher down payment for rental home loans may qualify you for better interest rates.

Borrow to improve credit

Business loans for rental property have many factors to determine your rates for rental home loans. You can improve your cash flow real estate investing on rental home loans by working on your credit score. Always check your credit scrore before trying to get business loans for rental property. It wil be the largest factor in setting the parameters for your rental home loans.

Credit scores around 700 and below can start to be costly to maintain the same interest rate on your rental home loans. Rates can increase in range from one-quarter of a point to 2 points to keep the same rate so it makes sense to start with a higher initial credit score. Either that or pay higher interest on business loans for rental property.

Establish reserves – show financial strength

Reserves in your bank accounts (at least six months) to pay for expenses, (personal and investment-related) is a big plus to lenders. It shows strength to lenders giving them the confidence that your endevors will be successful.

Lenders want reserves for each property, to lenders, a large reserve is about as good as having 100% occupancy for your rental investment property.

Undercut the banks

Banks won't fund your rental real estate investments?  You want an investment loan, but not the high cost of hard money.  Banks are primarly interested in your personal credit and personal tax returns. We don’t really care about personal tax returns, just the property cash flow. Rental Home Financing, a direct non-bank commercial real estate lender offerscompetitive financing from $300k to $40MM. We offer blanket loans for investors looking to bundle groups of SFR (1-4 unit), Condos, Townhomes, and Multifamily Apartments.

We are offering permanent financing for investors with at least 5 leases in most areas of the country with our innovative new programs geared toward the entrepreneur.

Easy Approval Pre-Application - CLICK HERE

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Rental Home Financing
9465 Counselors Way
Suite #200,
Indianapolis, IN 46240

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Rental Home Financing originates commercial blanket loans with a commercial purpose and is not currently authorized to make such loans in all areas of the United States. Specific circumstances will determine whether we have the ability approve/close portfolio rental home loans in your state(s). 

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