Securing a mortgage for your personal home is different than getting a loan for an investment property. You might need to think creatively to secure Arizona rental property loans.

There are many differences in the finance process when you are seeking investment loans including rental property loans. In most cases, you are already carrying a loan for your own home, so that makes getting a traditional loan even more challenging. And because mortgage insurance does not cover investment properties, you will also need to be able to invest at least 20% of the purchase in the down payment. But there are a few tips that can help you to secure Rental Property Loans in Arizona to begin your career in real estate investing.

As mentioned, the down payment for a loan to purchase a rental or any investment property will require a deposit of 20% or more. And it is important to remember that having instant equity in the property is always good for a borrower. If you can invest 25% or more in the down payment, that equity will help to get you a lower interest rate as well as increasing the potential for securing any loan that you are seeking. A high credit score is also important when seeking a very competitive interest rate and getting approval for a loan.

Securing Rental Property Loans in Arizona can require some flexibility from the lender, so you are more likely to get financed when using a smaller bank or mortgage lender. Larger traditional banks and mortgage lenders tend to be very strict when it comes to the loan terms and the qualifications required to secure a loan. But smaller lenders and private hard money lenders are known to be much more accommodating to their potential borrowers.

Owner Financing

As the bank’s loan criteria have become more stringent, sellers have become more open to owner financing. There are simply not as many well-qualified buyers, and a motivated seller is often willing to extend owner financing to potential buyers. But it is critical that buyers have any owner financing documentation reviewed by a legal professional to be certain that the deal is acceptable to the buyer. Terms and clauses in an owner financing contract are legally binding once signed and should not be one-sided to favor only the owner.

Be Creative

There are many ways that a resourceful buyer can acquire the cash needed to purchase a rental property. In some cases, equity or a line of credit on a personal residence can be used for the down payment. Other buyers choose to cash advance credit cards or to secure a personal signature loan to make a down payment on an investment property. Others turn to friends and family for loans or even a peer-to-peer lending site. What is important is that you are realistic about the amount of money that you can repay and the number of loans that you can manage to pay off at one time. Overextending yourself to make a down payment on a rental property is taking a large risk and could end up costing you the property before you even pay off the down payment loans.

Dennis Dahlberg
Broker/RI/CEO/MLO

Level 4 Funding LLC 
Hard Money Lender

Hard Money Loans

Hard Money Loan

Arizona Tel:  (623) 582-4444

Texas Tel:      (512) 516-1177

Dennis@level4funding.com

Dennis Dahlberg Broker/RI/CEO

NMLS 1057378 | AZMB 0923961 | MLO 1057378

22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027

111 Congress Ave | Austin | Texas | 78701  

About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

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