Owning an investment property can be rewarding and lucrative, offering the potential for long-term financial stability and building generational wealth. For many, buying their first investment property marks a significant step towards achieving financial goals. The more you learn about the opportunities that will open up to you as a real estate investor, the more likely you will want to get started as soon as possible.
The biggest hurdle between most first time investors and their first investment: capitol. If you are like many investors, your primary question is “how can I qualify for the loan?”
One of our most popular mortgage solutions for real estate investors is the cash flow mortgage. If you need to learn more about this type of loan, keep reading as we explore how to purchase your first investment property using a cash flow mortgage and why the hard work and sacrifices involved in real estate investment are ultimately worthwhile.
What is a cash flow mortgage?
A cash flow mortgage, also known as an income property loan or investment property mortgage, is a type of loan specifically designed for real estate investors. Unlike traditional mortgages for primary residences, cash flow mortgages are tailored to the unique needs of investors seeking rental income from their properties.
To qualify for a cash flow mortgage with us, you don’t need to provide income and tax return information as you would with a traditional loan. Instead, this type of mortgage is approved based on the income potential (the predicted cash flow) of the property. In order to use a cash flow mortgage, you must be purchasing an investment property.
If you’d like to learn more about the current rates and terms for a cash flow mortgage or whether you qualify, feel free to reach out to us any time.
What should you look for in your first investment property?
One of the best ways to minimize risk and make sure your sacrifices and hard work are worthwhile is to choose your first investment property carefully. We have some tips to help.
Set Clear Goals
Before diving into real estate investment, define your financial goals. Determine what type of property you want to invest in, your expected return on investment (ROI), and your long-term objectives. Setting clear and realistic goals is essential to set yourself up for success. Take the time to talk to more experienced investors about their experience as you set your goals, making sure you are on the right track.
Choose Your Location Carefully
Thoroughly research potential investment markets. Consider factors like job growth, population trends, and rental demand. Identify neighborhoods that align with your investment strategy. This will differ depending on your goals, like whether you are looking to flip a house, market it for long term tenants, or create a short term vacation rental.
Do Your Due Diligence
Even when the property is looking promising, make sure that it is everything you think it is. Conduct a thorough property inspection and due diligence to uncover any issues that may affect your investment, and be willing to walk away if a major issue is revealed. Especially with a cash flow mortgage where you may be dependent on the income from the property, you need to purchase something that can be ready to start making you money as fast as possible.
Be Willing to Adapt
Remember, you may do everything right and still decide a year or two later that you want to invest in something else. If that happens, we are here for you. Whether you decide to sell the property and buy something else, or pull from your equity to fund another investment, we are waiting to be a part of the team that helps you succeed.
To learn more about a cash flow mortgage or apply today, contact us. We are ready to help you reach your real estate goals.