Some real estate investors have a short time horizon and focus on fix & flips—where they are purchasing a property, renovating it, and then selling it for a profit. Others prefer the “buy and hold” strategy where they purchase a property for the purpose of generating a steady flow of rental income. One of our popular short-term loan products is rental loans—loans extended for just this purpose—to allow the investor to purchase the property he intends to hold to generate rental income.
The challenge is how to identify whether a prospective tenant is going to prove to be “reliable.”
He will say he needs to move in right away and will have a legitimate-sounding sob story for why that is the case.
The important steps to take are:
Meet the prospective tenant in person and ensure that he fills out the application completely. Make sure that the application requires:
Have a background check run that includes a credit check, criminal history check, and an eviction check. Some options include MyRental, Cozy, MySmartMove, and Innago
Check the public domain for any “red flags.”
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*All loans subject to underwriting and approval.
Rates may change with market conditions.