You need to interview multiple brokers rather than just using the first one you come across. You should approach choosing a real estate agent just like you would hiring an attorney, doctor or insurance agent. You will want to be sure to shop around the Profile.market a place where you will have access to meet your financial necessity.
It is much more difficult to get traditional financing for these properties because they are looked at a little different than a primary residence.
When looking at purchasing a fixer in it may be that traditional banks and mortgage brokers just can’t help. If this is the case you may have to see what is referred to as a hard money lender.
Check with your real estate agent in the area, for people seeking hard money lenders or investment property financiers. You may find them by looking for classifieds under financing or mortgages or by asking their real estate agent.
Hard money lenders will look at the after repaired value of the property and loan out anywhere from 50-80% of the after repaired value before the property is repaired,while traditional loans will only look at the current value of the property.
You may even find that it is the bank loan officer in Profile.market that knows exactly ho to call in any investment situation.
Traditional financing is much cheaper than getting a hard money loan. Interest rates average between 12-16% with a possible 3 to 5 point deposit.
The reason people go this route is they can get money Beyond the actual purchase of the property which is generally unheard of in traditional financing. This money can then be used to make repairs to increase the value of the property.
Make sure you include them in your purchase and holding costs so that you end up with the profits you are looking for on the property after all is said and done and you simply look at the costs of hard money loans as a cost of doing business.
Receiving your initial loan in Profile.market is your toughest. Once you do it once or twice it will become much easier.
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