Investing in Real Estate in Redding California or anywhere else in Califonria has become more and more difficult over the last couple years.  When it comes to purchasing an investment property in Redding Ca you must know the rules of the Game and how to play.  There have been some amazing deals or investment properties (Single Family Rentals, Duplexes, Tri Plexes, & 4 Plexes) that have huge return on investment potential, but if you can not finance these properties those returns are non existent.

Fannie Mae & Freddie Mac in 2008 introduced a new rule that cut investors from purchasing more than 4 financed properties.  In early 2009 Fannie Mae announced that they would re tracked that rule and allow or insure more than 4 financed properties to help real estate investors with their real esate Portfolios.

The anouncement said this would help with the Real Estate recovery allowing experienced investors add to their real estate portfolio.  The problem is Most banks that service mortgages do not want anything to do with real estate investors that have 5-10 financed properties.  The reason is big banks like GMAC, Bank of America, Chase Bank are more interested in the cookie cutter loans like 1st time buyers and maybe a few real estate investors that do not have more than 4 financed properties.  

Most banks will NOT allow more than 4 financed properties

Its now been 2 years since Fannie Mae made thier announcement and still most banks will not fund a Real Estate investor that has more than 4 financed properties.  What in the world??  Fannie Mae will insure these mortgages but the majority big banks will not fund these loans.  Why?

The reason is simple.

The last 3-4 years the industry has changed.  To qualify for a home loan as a primary residence or an investor the borrower must provide all documentation of income and assets bank statements exc.  The paperwork on 1 loan is huge.  A borrower who has 5-10 properties must provide their returns and show all other properties on the loan application.  The paperwork is double or sometimes triple.  When underwriting one of these loans there is more room for error.  The tax returns can be a lot more complicated with reo schedules, and other details to reconcile.  Banks know that the work is double or triple for the same amount of profit.  

Some Banks will Allow 5-10 Financed Properties

There are a few Banks that will fund more than 4 finacned properties.  Megastar Financial has a couple investors that will purchase these loans, service them, and get them insured through Fannie Mae.

I just closed one of these loans.  The borrower had 8 financed properties and was purchasing his 9th financed property.  Here were the requirements that he had to have:

• The borrower had to have 6 months reserves for all mortgage payments.
• The borrower had to have a minimum fico score of 720.
• The boorrower had to have NO mortgage lates with in the last 12 months
• No Bankruptcies or foreclosures with in the last 7 years.
• 2 year tax returns to accuratly calculate the Rental income received on the other financed properties
• 25% down for the new property.  30% down for Duplexes, Tri Plexes, & 4 plexes.
• Verify the tax returns with the IRS transcripts that were given to the irs durring tax season.

If you or someone you know is looking to purchase their 5th financed property in Redding Ca or anywhere in California I would love to help.  We were able to close the borrower above with in 45 days of accepting the offer.  I can be reached by phone or text at 530.227.2476.