In your analysis, I noticed that you use a 10% down payment ($270k mortgage on a $300k purchase).
– Do investors typically use 10% when they do their analysis ?
– I thought lenders typically require a 30% down for an investment property, is that right ?
I was approaching from an owner-user standpoint, hence the more agressive 90% financing.
But you’re right, an investor probably would be looking at a 70% loan-to-value ratio, although they may or may not be able to find a lender that would go 75% 80%. They’d probably also be looking at a slightly higher mortgage interest rate as well.
Besides that, most lenders would require a debt service coverage ratio of at least 110%, meaning the net income would have to be 10% higher than the mortgage payment. That’s why SFRs typically don’t sell as rentals in this region – the buyers usually have to lie about occupancy to get the better terms.
