We are happy to announce Bay Mountain Capital’s new loan program: rental property loans. This will expand potential investment opportunities to include single family rentals for both new and experienced investors.
Rental properties are a good way to invigorate your portfolio with a mix of real estate properties. With our new offering, our borrowers will enjoy the same attentive service available to fix and flip borrowers in a greater range of property investment vehicles.
Bay Mountain Capital offers a low credit score rental loan program as well as a preferred rental loan program with more favorable interest rates for well-qualified borrowers.
Rental property investment loans are available with 36- and 60-month terms, and minimums are $50,000 in a primary market and $75,000 in a secondary market.
Advantages of Investing in Rental Property
Unlike fix and flip loans where you’re not getting any return on your investment until the property sells – and that selling price is an unknown factor – a rental property can begin providing you with a reliable return as soon as its fully occupied.
By ensuring the total in rent due to you is more than what it costs you to maintain the building and service the loan, you’re earning a return on your investment.
Rental investments are not effortless but with the right team in place, it can take less hands-on effort than investing in fix and flips, with fewer surprises like cost overruns.
The timeline of investing in rental properties is slower than the timeline of a standard fix and flip. Rentals also offer a relatively reliable market, especially in established or up-and-coming neighborhoods. There’s a fairly steady population of people seeking to rent homes, too. Rental properties are attractive to those relocating and to those who do not have the ability to obtain a mortgage due to other obligations like student loan debt.
A rental property investment benefits you in two ways:
- First, you’ll gain value as a result of any improvements you make to the property, and that value will also increase as the property appreciates over time. Much of that increase in value is up to you. If you want to make major upgrades that would be valued by the market, like an extra bathroom or bedroom, you can. If you want to save money by not hiring a property manager because you would prefer to be hands-on and do the work yourself, you can do that, too.
- And second, you build equity in the property as you pay down the mortgage (our rental loans are interest only, no principal paydown).
Your Rental Property Investment Strategy
In order to be successful in rental property investments, you need a plan, much like you would if you were investing in a residential fix and flip. Here are a few things to include in your plan:
- Develop your team of trusted advisors, like a real estate agent, general contractor, and if you’re hiring one, a property manager.
- Determine what makes a good rental investment for you: ideally, the money coming in from rent will cover all the necessities to keep the property well-maintained and the mortgage payment, plus some leftover.
- Talk to a lender like Bay Mountain Capital to discuss your financing options for rental properties.
- Do your homework and come to the table prepared to discuss down payment and collateral.
- Once you’ve chosen your rental property and secured the loan, it’s time for closing on the property, and if there are vacant units, get to work on filling them.
Rental properties are one way to strengthen your real estate portfolio. Although it can take hard work, it can be lucrative as you gain value through improvements, appreciation, and equity, especially for properties held long-term.
As an experienced real estate lender, Bay Mountain Capital has the insight to successfully expand its services to include single-family rental loans. Our knowledgeable team works hard to support our borrowers in pursuit of their investment goals.
Act now to contact BMC and learn why single-family rental loans should be part of your investment strategy.
About Bay Mountain Capital:
Bay Mountain Capital has been in business for more than a decade, closing approximately 2,000 loans. We specialize in financing all types of residential and commercial property investments throughout Texas and Georgia. Using common sense and value-added approach, we strive to incorporate these principles into our underwriting and closing processes.
As a direct lender, Bay Mountain Capital can close a loan within one day after receiving a complete file and clear title. The process generally takes two weeks for a residential loan but can be accelerated where circumstances require it.
We are primarily an asset-based lender, which means that qualification requirements are limited. Our rates and fees are among the lowest in the industry.