Securing Rental Property Loans in Arizona is not always as easy as just getting a mortgage. But some creative financing can be a big help.
When you begin to invest in rental properties, you will find that the larger the down payment, the more likely you are to get financed. Lenders like to see at least 20% down on Rental Property Loans in Arizona, but making a down payment of 25% or more is certain to get you more interest from lenders and even a better interest rate. But coming up with that large sum of money might pose a challenge. Thinking creatively could help you to make that big down payment to get a great interest rate and a really reasonable monthly payment on your rental property.
Unless you have a large savings account, chances are that you are going to need to make other arrangements when you need to make a 25% or more down payment. But one way that many first-time investors finance a first rental property is using a home equity line of credit on their home. This will provide you will a substantial amount of cash in most cases and it also allows for a longer repayment period. Many landlords will use some of the rent money coming in each month to make the HELOC payments to ease the personal financial burden.
Other homeowners will choose to refinance their home and remove the equity that they have built up. This is helpful because it does not include the extra monthly payment of the HELOC but it does increase the length of time that you are paying on your own home. This also only makes sense if you can get a good interest rate on your refinance.
Plan Ahead
If you have been thinking about breaking into the real estate investment business and you know that Rental Property Loans in Arizona require a large down payment, then hopefully you have been planning ahead. Having time to save for the larger down payment is also another way to avoid losing a property because you can’t cover the down payment. Some future real estate investors have chosen to work a second job to save for the down payment while others have decided to lower their cost of living to be able to save more. Either method works and will let you make the down payment without taking out another type of loan to pay it.
Borrow From Your Future
If you have a retirement account then you might be able to lend yourself the money for a large down payment. Many 401K plans allow you to take out a loan against your retirement savings. And in this case, the interest that you are paying is going back into your retirement account. Clearly, there are many ways to fund the large amount that you must initially put down on Rental Property Loans in Arizona, but the outcome is worth the risk. Make a wise choice on your first property, and then let the profit pay for your next property. In a few years, you can be living off of the rental income and continuing to grow your personal wealth.
Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com
Dennis Dahlberg Broker/RI/CEO
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.
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