Cash Flow For 95% Financing On Triplex?
I am looking to purchase a triplex. I would like to get a 95% LTV but the property will not cash flow. I have a very high credit rating and make over 250K year will I be able to still get financed at the 95% even though the property does not cash flow?
I realize you are from california but I find it hard to imagine anyone wanting to own rental property when it does not cash flow....
The loan is based on your debt to income ratios, among other things. As long as the ratio still works the bank probably won't care.
as long as YOUR other income sources can support the lenders requirements, there is no problem. Making $250k and having $249k in expenses would be a problem...its more about how much cash you can throw off each month. You've got to find a 95% LTV on an investment property first too...do you have a lender lined up for that?
Myfrogger...long time no see...how have those Central Iowa RE investor meetings been going? I've had some more time lately and have thought about showing up...
CA is a tough place to have cash flow. Typically lenders will look at 75% of the rental of all three units. They will subtract that from your debt service (monthly cost of loan and taxes/insurance) whatever left if not enough to cover costs will have to be covered by your www.income.If the market continues to climb like it has you my be able to come out ahead in the end. If it appreciates or if you are able to hold until the rents can be raised it you will make out ok. These are risks many investors won't take. When figuring this also take into account the tax advantages. If you have that type of income it should help some. Check with a CPA to see how much. Welcome to the board it is a great place to learn. 95% Loan is possible especially if you can document all of that income. Tere are even loans to 100% for up to 4 units...
Good Luck
Brian
the loans are available, but the terms...are terrible
Thanks everyone for your feed back. A few comments have been made regarding why a person would buy a non cashflowing property. I am looking to redevelop the 3 unit complex into 6 condos. I have a lender that will cover 75% on the future value of the units. In short I am hoping to fund this deal with only 5% plus 30K or so in soft costs. Have you seen this done before?
This is a great Forum and I look forward to learning and sharing.
bensain,
95% on a three unit NOO can be done, not easy but it can be done. The down side is the rate will be high. You will need to work with someone who does investment property loans. They will know who to call and will know how to set up the deal. Check with your local investment groups for recomended lenders / brokers.
On your end you need good credit, income and a DTI that will show that the negative cashflow is not a problem.
This thread is over a year and a half old. So, hopefully they got their financing resolved long-long ago.
: )