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Investment Property Loans in Florida

Do you want to earn passive income instead of punching a clock? If so, an investment property loan could be your ticket to financial freedom. 

Simply put, this lending option helps borrowers purchase income-generating properties. You may have your heart set on a downtown duplex. Or, you may want to purchase a fixer-upper on the coast to flip and sell. No matter your vision for the future, our Mortgage Coaches can help you get prequalified¹ for an investment property loan in Florida.

Apply for an investment property loan

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Contents

• What Is an Investment Property Loan?
• Investment Property Loan Eligibility in Florida
• Types of Investment Property Loans Offered in Florida
• Estimating Cash Flow for Investment Property Loans 
• Pros & Cons of Investment Property Loans
• Work With Dash to Secure an Investment Property Loan
• Florida Investment Property Loan FAQs  

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What Is an Investment Property Loan? 

An investment property loan is designed for homebuyers who want to purchase income-generating real estate. These mortgages can be used to finance a variety of properties, including:  

• Condos
• Apartments
• Manufactured homes
• Single-family houses
• Duplexes and quadplexes

The possibility of passive income is pretty enticing, right? Unfortunately, there’s a downside. 

Since borrowers are more likely to default on investment properties than on primary residences, lenders perceive these mortgages as super risky. To counterbalance that risk, lenders increase the interest rate.

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Investment Property Loan Eligibility in Florida 

Before you quit your day job to be a landlord, make sure you can qualify for an investment property loan in Florida. Though eligibility requirements vary from lender to lender, a borrower in Florida must typically have:

• A down payment of at least 15 to 20% for single-family homes. If you want to purchase a duplex or quadplex, expect to fork out 25% or more. 
• A credit score of at least 620. But don’t be surprised if your lender requires a higher credit score. 
• A debt-to-income ratio of 36% or less. To calculate your DTI, divide your monthly debt expenses by your pre-tax income. 
• Sufficient cash reserves to pay the mortgage for up to six months.  
• An estimate of the cost of necessary repairs if you want to purchase a fixer-upper. Lenders may also want to know the after-repair value (ARV), which is the value of the home after renovations have been made.

Not sure if you’ll qualify for a Florida investment property loan? Contact Dash Home Loans online or give us a call at 305-614-2746 today.

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Estimating Cash Flow for Investment Property Loans  

Let’s say you want to purchase a waterfront condo in Key Largo and rent it out to vacationers. 

To make certain that you can turn a profit, your lender may ask for a cash flow forecast. Cash forecasting is a way of calculating your projected income and expenses.  

Your gross cash flow accounts for all the money you’ll rake in, minus vacancies. 

For example, assuming a 6% vacancy rate for a property generating $45,000 each year, you would lose $2,700 ($45,000 x .06 = $2,700). So, you could expect your gross cash flow to be $42,300. 

Of course, you’ll have costs too. Your cash flow forecast should consider expenses like:

• Insurance
• Property taxes
• Capital expenditures
• Maintenance costs
• Leasing fees
• Property management fees

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Pros & Cons of Investment Property Loans

We’ll start with the positives. If you want a side hustle, an investment property loan in Florida can help you establish a bonafide revenue stream. With this financing tool, you can purchase a bungalow in Destin and flip it for a profit. Or, you can buy a quadplex in Orlando and find some year-round tenants.    

Of course, there are some serious negatives associated with investment property loans. Namely, they can be pretty hard to qualify for. 
Lenders look for above-average credit and sufficient cash reserves. If and when you do get qualified, you could be hitched to a super-high APR⁴ that eats into your profits.

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Work With Dash to Secure an Investment Property Loan in Florida 

Are you feeling a little seasick? We understand. Navigating the choppy waters of mortgage financing can be scary. Even the most intrepid of real estate gurus get a little unnerved by the prospect of applying for an investment property loan in Florida. 

But when you work with Dash Home Loans, our Mortgage Coaches will be with you for every nautical mile. 

Unlike other mortgage lenders in Florida, we won’t drown you in superfluous paperwork and legalese. Instead, we’ll offer unparalleled customer service (just check out our five-star reviews) and walk you step-by-step through our simplified lending process.  
Ready to set sail? Get started by contacting us online or by calling 305-614-2746.