Phone: 732-345-5000

Brian Benjamin

NMLS # 5192


Investment Loans

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Investment Loans

Investment Properties, single family to 4 family residential properties that possess a strong return on your financial investment, will not last on the market very long. Missing out on an investment property could cost you thousands in unrealized profits. Don’t let an inexperienced mortgage broker jeopardize your purchase.

Let your personal Loan Officer at Two River Mortgage & Investment custom tailor the perfect loan to meet your specific goals. Whether it’s your intent is to purchase with a low down-payment, maximize the property’s potential cash flow, or secure financing with either a fixed rate for the long-term or an ARM for shorter term profits, your person Loan Officer will analyze your needs and goals and recommend a program to fit your specific situation

Real Estate Investment Properties

Freddie Mac / Fannie Mae have guideline restrictions that limit how much and how many Investment Properties you are capable of financing. There was a modification to the guidelines used by many lenders that will not allow a borrower to utilize the rental from an investment property if the borrower does not have a verifiable two-year landlord history.

Other guideline restrictions include but are not limited to; only 75% of rental income will be utilized to qualify and the number of properties financed are limited to a total of ten including your primary residence. One advantage is you are allowed to add back depreciation from investment properties to qualify.

Interest Only Programs allow Investors to finance rental properties paying only the interest on the loan for a specified number of years. An Interest Only payment does not fully amortized payments making the monthly cash flow greater, thus a higher short-term rate of return. The Interest Only is a good tactic when the final goal is a short-term hold and sell. The negative to the Interest Only mortgage in that the principal balance of the loan remains the same during the specified period.

1031 Exchanges sometimes called equity transfers offer the seller of an investment property the opportunity to sell a property and postpone the capital gain or loss until a future period. Usually, this tax liability will be realized when the new property is sold in the future unless it too is sold under a 1031 Exchange.

Determine if the initial legal and accounting costs offset the current tax implications of the sale of the subject property.

Tax Implications Prior to the purchase of an investment property a borrower should first consult with their CPA, CFP or accountant. You need to discuss the advantages and disadvantages of owning an investment property. The borrower should be aware of the time periods of long-term and short-term capital gains, depreciation of the asset, deductions of expenses and the effects of rental income.

Legal Implications Consult a local legal professional to understand any State or local rental regulations. Some examples are rent control laws, rental registrations, landlord notifications, deposit escrow accounts, rental lease inclusions or exclusions, Home Steading, etc.