There is a lot of different information out there on lending.
Even in the posts that you can find
online about lending there are so few posts that are dedicated to us investors. So my goal here is to provide you with some
good information that can be useful for any level of an investor. There will be 5 different posts to break it
up a little but feel free to ask any question that you may have. If you have the question, chances are someone
else does too. So ask away.
Today’s topic is “The Beginning” – just some really simple
and easy items for you to understand about borrowing money. Let’s get started:
1.
Cash is STILL King – if you are buying
properties with cash, then there’s a lot less to worry about. You don’t have to “qualify” to buy it. You don’t have to have the renovations
“approved” – it’s up to you what to do with the home. But there’s not a lot of people who have tens
of thousands of dollars just laying around.
So for most of us we have to borrow money in some capacity. And even SOME cash investors will still
borrower money AFTER buying a home with cash if they plan on keeping it (but
more on that later).
2.
Conditions for a loan – even if you borrowed
$100 from a friend that friend will say something like “just make sure and pay
me back by next Wednesday”. That’s what
we call a ‘condition’ of your loan. If
you want my $100 then you got to pay me back by Wednesday! So when you are
borrowing thousands and thousands and thousands of dollars, there’s going to be
a few more conditions. Like “proving you
exist” (seriously, you will have to do this) or “having a licensed professional
do the repairs”, or checking your credit to see if you are likely to pay the
lender back, and so forth. If you don’t
like the conditions of the loan, then just go to #1 above. Whether it’s hard money, conventional money,
or portfolio money there will be conditions to get you approved (and I’ll
address more the different rules later).
The important thing to get from your lender is do they understand
lending to investors? If they do
understand investor loans, then they should be able to tell you what all the
conditions will be UP FRONT so you know what to expect.
3.
What loan is RIGHT for me? – And this topic we
can talk on AT LENGTH. And we will in the
next few posts. Search for Investment
Lending 101 (Part 2: Loan Types) and read on!
Andrew Postell
Gateway Mortgage
817-873-0621
Andrew.postell@gatewayloan.com
