CategoryFinancing

“AS-IS” VS. “SUBJECT TO” HOME APPRAISALS

The difference between “As-Is” and “Subject To” home appraisal is fairly simple.  With an “As-Is” home appraisal, the appraiser is using the current condition of the home to help determine its appraised value.   In a “Subject To” home appraisal, the appraiser is including future improvements to the home to help determine its value.  So, which approach is the right one?  Well, it depends on the...

WHAT IS A PORTFOLIO LENDER?

What is a portfolio lender?  A portfolio lender is a bank or other lending institution that makes mortgage loans with the intention of holding the loans (in-house) in their investment portfolio as opposed to selling their mortgages on the secondary mortgage market to a third-party organization – the largest of which is Fannie Mae.   Unlike lenders who sell mortgages, portfolio lenders are...

HOW TO FIND A BANK TO FINANCE YOUR RENTAL PROPERTY

Most banks will finance rental properties, but you want to work with a bank that best aligns with your real estate investment goals.  If you plan on mortgaging more than 4 rental properties, then you want to work with a portfolio lender as opposed to a lender who sells their loans on the secondary mortgage market (I’ll explain portfolio lending later).   A lot of banks, especially the big...

PURCHASE MORTGAGE VS. CASH-OUT REFINANCE

Purchase Mortgage A purchase mortgage is where a bank provides you with financing to purchase a property, and the lender will usually want 20% down.   So, let’s assume you want to purchase a property for $100,000.   The lender will provide $80,000, and you cough up $20,000.  The problem with going the purchase mortgage route is because you’re always putting 20% down, you’ll probably run out of...

UNDERSTANDING THE SALES COMPARISON APPROACH

Of the three main types of real estate appraisals – cost, sales-comparison, and income capitalization – you’ll more than likely be dealing with values based on the sales comparison approach as a residential real estate investor.   What Is The Sales Comparison Approach? The sales comparison approach is what it says, the value of the subject property is determined by what similar...

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