Buying your first investment property is exciting and also filled with many decisions. One of the first decisions you must make is choosing real estate financing. When you purchase an investment property, you probably have questions about the best types of investor loans in Texas. There’s a lot to consider but take a moment and keep reading to get a better understanding of real estate loans for investment properties.
Do Your Research
There are a lot of loan products on the market. Some are great, and others aren’t worth much. The last thing you want to do is rush into making a decision. Research all the investor loans in Houston, TX, and know what you’re looking for. Are you planning to use the investment property as a rental or will you be flipping the property? If you’re planning to flip the property, be careful with high-risk loans that start off with a small APR rate and increase after a few months. Although you have plans to sell the property quickly, keep in mind that the market doesn’t always support a quick sale.
There are several types of Texas investor real estate loans designed specifically for house flippers. These loans are often tiered products based on credit-worthiness and offer 6-12-month loan terms with no down payment required. You can also find loans available for 20-year terms with low interest rates for one-to-four-family unit housing. Whatever type of investment property you’re interested in, there’s a loan for you as long as you do your research.
Preapproval isn’t just for buyers who plan to live happily ever after in their dream home. Getting preapproved for a loan is a smart idea for every type of buyer. Not only does this let you know how much you can actually afford, but it makes your offer as strong as possible.
Don’t Spend to the Top of Your Budget
With your first investment property, it’s important to keep your costs as low as possible. This means not spending your full budget on a property. There are plenty of Houston, TX, investor real estate loans for all price points. Staying toward the lower end of your budget—not just in terms of price but loan terms too—keeps you in the safe zone. It makes investing in real estate as stress-free as possible and sets you up to build your portfolio.
Work with Loan Companies Geared toward Real Estate Investors
A mistake that many first-time property investors make is that they choose to work with a lender that doesn’t understand your unique needs. Many traditional loan products place restrictions on their products that make it difficult to make money off your purchase. For example, if you’re planning to flip a house, a traditional FHA loan that requires you to live in the home for a certain number of years isn’t going to work for you. When you work directly with real estate investor lenders, you have access to loans that make sense for your goals.
As a first-time real estate investor, the best decision you can make is working with a company that understands the value of investor real estate loans in Texas. If you’re looking for affordable investment loans, contact Investor Loan Source and tell them about your project for guidance and great loan programs.