[SAMPLE] Fictional preview material. This discussion was written by the site administrator to preview the Community design. Names, numbers and scenarios are hypothetical. It is not advice and not a real member post.
Hypothetical scenario: first-time investor, about $300,000 target purchase, $90,000 saved, W-2 income, steady credit. These are the options people usually compare. Rates and terms below are illustrative only and change constantly, so treat them as a way to compare, not as quotes.
- Conventional investment loan: typically 15-25% down. At 25% down ($75,000) and 7.0%, payment on $225,000 is about $1,497/month principal and interest. Full income and debt-to-income documentation.
- DSCR loan: qualifies mostly on the property rent rather than personal income. Often needs 20-25% down, a higher rate (say 7.75%, about $1,612/month on $225,000) and fees around 1.5 points (about $3,375).
- House hack (owner-occupied duplex to fourplex): much lower down payments, but you must live in one unit and the price per property is higher.
- HELOC on a primary home: flexible, but it puts your own home at risk if the investment underperforms.
Whatever the route, plan for reserves on top of the down payment and closing costs. How would you rank these for someone buying their first property, and what would change your answer?
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