Investment • February 28, 2024 • 8 min read
Investment Property Financing: A Complete Guide
Learn about financing options and strategies for building your real estate investment portfolio in Michigan.
Investment Property Loan Options
Conventional Investment Property Loans
Traditional financing for investment properties
Features
- Down payments from 15-25%
- Competitive interest rates
- Terms up to 30 years
- Multiple property financing available
Requirements
- Credit score 680+
- Debt-to-income ratio under 45%
- Cash reserves for 6+ months
- Strong rental income potential
Portfolio Loans
Specialized loans for multiple properties
Features
- Finance multiple properties
- Flexible underwriting
- Blanket loans available
- Cross-collateralization options
Requirements
- Experience in property management
- Substantial cash reserves
- Good property portfolio performance
- Strong credit history
Fix-and-Flip Loans
Short-term financing for property rehabilitation
Features
- Quick funding
- Interest-only payments
- Renovation costs included
- Short term (6-24 months)
Requirements
- Experience in renovations
- Detailed project plan
- 20%+ down payment
- Exit strategy
Investment Strategies
House Hacking
Live in one unit while renting others
- Lower down payment requirements
- Better interest rates
- Live for reduced/free housing costs
- Learn property management
BRRRR Method
Buy, Rehab, Rent, Refinance, Repeat
- Recover initial investment
- Build portfolio quickly
- Force appreciation through improvements
- Long-term wealth building
Long-term Buy and Hold
Purchase properties for long-term appreciation
- Steady monthly cash flow
- Property appreciation
- Tax benefits
- Build equity over time
Key Considerations
Financial Preparation
- Build strong credit score
- Save for larger down payments
- Establish cash reserves
- Create business plan
Property Analysis
- Calculate potential ROI
- Evaluate market conditions
- Assess property condition
- Research rental demand
Risk Management
- Maintain adequate insurance
- Plan for vacancies
- Budget for maintenance
- Consider property management
Ready to Start Your Investment Journey?
Our investment property specialists can help you find the right financing solution for your goals.