Monday, October 22, 2012

Income property and commercial financing

If you are considering an investment in income property or a larger multi-unit property you need to have a sold business plan and strategy.  You can qualify for traditional financing if you are purchasing a 4 unit or smaller. It is even easier to qualify if you are planning on living in one of the units.  You will then qualify for owner occupant financing.  The advantages with this type of financing could be beneficial.  The terms may be more favorable:  less down payment may be required, even lower interest rates may be possible and longer loan terms.  If you want to live in a unit in  4 plex for a year or more, you will have an advantage when it comes to financing and this could start your investing career out on the fast track. 

However, if you are looking to buy for investment purposes only, financing of 4 units or less is still much easier and is consider residential.  Most loan brokers can readily qualify you for cash flowing property of this size.  Once you get to five units or more the entire picture changes and the qualifications as well down payment requirements change.  The rates are typically higher and unless you have a tract record of managing and owing smaller rental units it is very difficult to get approved. If you are starting out investing it is a great idea to start with property consisting of 4 units or less and get as much good experience managing cash flowing units as possible.  You will likely still need to have some capital to invest but probably not as much as with a commercial loan.  The rates will be better on your borrowed fund and you will be starting at a level that is manageable.  The 4 unit property is a perfect way to learn the business of property management.  It will give you a chance to learn the laws and the art of dealing with both good and problem tenants. 

If you are considering buying or selling a home or income property in Las Vegas check out and call Chris LaHaie, Realtor at 702-338-8526 to get your property for business plan to purchase evaluated for free.  Chris has over 19 years experience in the real estate business.  He can guide you to a highly successful transaction or help you build an extensive portfolio of investments. 

Sell your las Vegas home here

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