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 financing

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.