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Mar 16 2022

Generating Passive Income with an Investment Loan

A new lending program has arrived and it can help you generate passive income. If you’ve ever thought about owning a rental property, take a look at these two determining factors that can kickstart or double-down your passive income.

Revenue Based Investment Loan

This investment loan has several term options, but the 30 year and 40 year terms can give a big boost. The advantage of this lending program is the revenue based qualifying. This means that a borrower does not need 2 years of proving income, nor W2s, nor paystubs, nor does DTI come into play. Qualification for this loan rests on the revenue stream of the property. This opens a lot of purchasing options, especially when looking for homes in a low inventory market (Seller’s Market). Instead of being limited to a particular price range, say $300,000-$325,000, now you qualify for any home between $250,000 and up to $2million so long as the rental income can cover 100% of the mortgage. This means that you have a broader range of homes to look at purchasing.

Investment Loan Assets

The key to this program is cash. The absolute maximum Loan-to-Value on any loan is 85%. The absolute minimum loan amount must be $100,000. Now even though personal income and DTI do not matter, Credit Score does play a factor. Therefore, a 664 credit score may require an 80% LTV or even a $200,000 minimum loan, whereas a credit score above 800 may approve a loan at the minimum qualifications. The underwriter determines the final decision when working with close deals.

A borrower’s assets for this program must cover the down payment, six months rent reserves, and closing costs. So if you’ve got some cash and a good credit score, regardless of your debts, there’s a good chance this program might work for you. Be sure to evaluate your budget and calculate the risks if a unit goes empty and you need to cover the vacant rent.

Investment Property Loans

Whatever your situation may be, there’s a Juicy Solution waiting for you. There are many lending options out there to suit your needs. If you’re looking to build some passive income, remember that an existing lease agreement or income appraisal on a new rental property is all that is needed to qualify for this particular investment program. Feel free to call, text, or email and I’d love to see what I can do to help you build your dreams.