What to know whether you’re new to buying investment properties or already have properties in your portfolio.

While a positive return on investment (ROI) isn’t guaranteed on investment properties, Americans have been using them to build wealth for over two centuries. Yesteryear’s tenant farming and boarding houses have been replaced by investments in multi-family housing and commercial real estate. If you plan to buy or already have an investment property, here are some things to know about planning and financing.

Learn as much as you can before you buy

It’s important for every investor to prepare before they buy. Consult with several industry experts, including financial advisors, other real estate investor/owners, realtors, insurance providers and tax preparers. Experienced professionals can help you identify strategies, opportunities and pitfalls to avoid.

Learn all that you can about the options that are available. If purchasing multiple investment properties, map out a strategic plan to make sure it translates to cash flow on paper.

Financing for investment properties

Consumers offers financing for folks new to buying investment properties as well those who already have properties in their portfolio.

For new purchases, we offer the same conventional loan programs that are available at any lender or broker plus our own unique financing option offering a down payment of as low as 10% (versus 20% + down for most other lenders). Our portfolio product allows guidelines that are different than typical Fannie Mae or Freddie Mac rules, giving investors more options.

For investors who already own property, we offer ways to lower monthly expenses and increase monthly cash flow. For example, refinancing a property loan can lower the interest rate or extend the loan term so that the payment is reduced.

Additionally, we have loans for non-occupant owners to do a cash-out refinance that allows them to leverage their equity the property.

Advantages of Consumers versus a bank

When you finance an investment property with Consumers you get many advantages versus a bank. Mortgage sales manager Renée Ziska describes how:

“First, the level of service that we expect of ourselves to provide a financing experience that beats all other is our biggest differentiating factor. Additionally, we offer products that are unique to Consumers. Also, and as equally important to the first two—we truly appreciate our local community and work hard to find options and solutions for the folks that provide products and services in turn. We see it as a reciprocal relationship. The team we employ shares this same vision.”

The type of property determine the type of financing

There is more than one kind of real estate loan for investment properties. For single-family residential homes with up to four units, investors use a traditional home mortgage. Investors buying properties with five or more units should seek a commercial real estate loan.

 

 

All loans subject to approval. Rates, terms, and conditions are subject to change and may vary based on credit worthiness, qualifications, and collateral conditions. Federally insured by NCUA