Other than my home, I have never invested in real estate. My wife and I would like to have a condo in Myrtle Beach. We would rent it out through most of the year, then we would stay there through the winter months.
Providing all the numbers looked good, I was just wondering how eager lenders are these days to lend on these types of investment properties.
We intend to do this no matter what.
Any info and guidance will be deeply appreciated.
Great website.
Thank You
Chuck
My experience has been lenders will give you a loan if your credit and down payment are enough. But lending guidlines are different based upon the use of the property. For example, an investment property has different underwriting guidlines than a vacation or primary residence. For example, a 65% LTV ratio may be required for rental, otherwise you may need to pay mortgage insurance. You should be aware of this.
Sounds like you want to buy a second home, not an investment property. A second home is not an investment. I advise not to invest in condo’s due to the HOA fees and regulations. Single family homes make a better rental. But if you do purchase, you have to make sure the condo complex allows rentals. Also, you would need to let the lender know if you are purchasing a second home or investment property. I think the rate and terms are different.
You need to decide what your goals are first. If you want to get your real estate portfolio going, then buy an investment property. Just decide what is most important at the moment.
Lenders are eager to sell the property coz the real estate prices have shown an increase in the last year and it is profitable for them to get involved in a deal.
Condo Financing
Condo Financing is mostly Taboo. If you are purchasing it as a seasonal occupant, be ready to part with a good down payment, more than the typical 10% FNMA requires for a 2nd home detached home (SFR) or even a PUD or Villa. Understand your exit strategy and your target markets access to money. By default, you are already eliminating 75%+++ of the buyer market due to the property type. Add “Lack of high ltv financing” to the equation, and by design, condos offer poor resale. There are always exceptions to the rule. For example; a condo in a highly desirable area with limited condo & sfr inventory will sell faster than say a condo in an areas flooded with condos; i.e. Orlando, Naples, etc. If your condo is FHA Approved and FNMA Warrantable, it will add value.