Finding an investor-friendly lender means all the world for real estate investors. If you are a newbie in the world of real estate investing, it is vital to know that some lenders are more favorable than others when it comes to financing real estate investors. 

A successful rental property business usually depends on the ability of the owner to get competitive financing. The loan amount you avail and its accompanying interest rate can either be an advantage or disadvantage for your rental property business. 

In this blog post, we will explore what it is like to have an investor-friendly lender and how to find such a lender. 

How to Describe an Investor-Friendly Lender?

The familiarity of the real estate market and the emphasis on the long-term potential of the property are the marks of an investor-friendly lender.

Typically, many conventional lenders may raise the standards when lending to investors. They are bent on imposing unfavorable requirements that make it difficult for real estate investors to get financing. One example is an FHA loan in which the investor-borrower has to live in the property for a year before he can rent out a single-family home to a tenant. 

The good thing about working with an investor-friendly lender is they understand the predicaments of investors. These lenders can guide investors to the right financing and help them understand the rules. They can also offer more favorable loan options and explain to you the upsides and downsides of each. 

Private Money and Hard Money Loans

When traditional loans prove difficult to avail, real estate investors may resort to private and hard money loans. Unlike conventional lenders, you can get approved for a private and hard money loan by a successful assessment of the value of the property and its potential income and not your personal or W-2 income. 

These loan options can help close the home purchase faster, but they require a larger down payment and have higher interest rates. You can use a private and hard money loan to buy a property that is not in mint condition. Lenders offering such loans may approve your application to buy and renovate that property.

Flippers and BRRRR method investors who expect a refinance or sale within a few months can use private and hard money loans. 

How to Find an Investor-Friendly Lender

It is vital to look for an investor-friendly lender if you are into investment properties. Take note of these tips to find such a lender. 

Local Networking

Learn how to connect with your fellow investors in your locality. Networking with local investors who have multiple rental property investments can give you knowledge and advice on the basics and secrets of the trade, particularly in getting financing and owning a rental property. 

Real estate agents and mortgage brokers can also contribute to your success as an investor in terms of getting loans, insurance, and leads. So, double your efforts to establish a business relationship with the people in the industry by attending local events and joining groups or organizations. 

BiggerPockets Forums

BiggerPockets forums are a good source of information on investment property loans, competitive interest rates, and down payment terms. There are seasoned investors in these forums who can offer advice on finding the best lenders near you and what loan options to apply for that suit your financial situation. 

Google

Google is a platform to search for local lenders and chat with your fellow real estate investors. The information you can gather from Google can contribute to your investment success. 

If you want to know about a particular lender, you can read Google reviews to determine its reputation and competence in the lending business. You can also visit the lender’s website to know the available loan options that are right for you. 

Social Media

You can connect with real estate investors, agents, and lenders on social media. For instance, you can post asking for recommendations of the best lenders near you. People in the industry who see your post can give their advice and suggestions freely. Be sure to increase your social media presence by posting industry-related topics. 

Cold Calling

The connection you can establish through cold calling is more personal than email or text. You can start by calling fellow investors in your area and asking for lender recommendations. 

Then, call the lenders and mortgage brokers and ask them about their loan offerings. From this point, you can express your interest in getting financing to purchase an investment property and the potential of your investment that can also benefit them. 

Takeaway

Look for investor-friendly lenders if you want to invest in rental properties. There are lenders that provide private and hard money loans for such a purpose. These loan options can be advantageous to you as an investor because you can access them quickly to close the home purchase.