Financing Challenges for Boulder Investment Properties

by David Gerlitz on December 30, 2010

Boulder investment properties offer great potential for rewards, but financing here as in much of the country can be a bit tricky.

Financing Challenges For Boulder Investment Properties

A Typical Boulder Real Estate Investment Scenario

Let us say you have got $50,000 burning a hole in your pocket.  You are not earning any interest from the bank on your CD which is coming up for renewal soon.  You have to practically pay the government to hold treasury securities.  You have been burned by the stock market and are wary of trying that again right now.  So what to do?  You decide on a Boulder Real Estate Investment Property.

With some searching and a little luck, you come across a 2 bedroom townhome in good condition which will earn a  higher yield and provide for the tenants to pay down the bank debt.  The townhome is in a 4 unit community which also has a couple of other rental units.

Uh-oh.  You may have problems financing this property through your large commercial bank.  These banks are selling off their loans to Fannie Mae and Freddie Mac (I’ll avoid calling them Phoney & Fraudey)  but because of new federal guidelines, Fannie and Freddie won’t finance this property because of the owner-occupancy ratios of the community.  For a community such as this, if 3 of the 4 units are not owner-occupied, it will not get Fannie or Freddie financing.  In fact, there are communities such as this all over the country right now struggling with this issue.

Well, there IS good news.  There are lenders who will finance this type of property.  Here at Investment Property Colorado, we know who the lenders are, and we know where the best properties are to maximize your total return give us a call today! 720-306-8017

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